I don’t really know Scoble but he is terribly popular and he has interfaced with lots of smart people at Microsoft. However, his response to my previous post didn’t provide anything substantial to chew on but I’ll address it anyway. His response:

you can’t live off your existing community and be “cool”.

Why not? That’s what all companies do. Make money off consumers and get to be cool in the process (iPod, Google, et al).

His reasoning:

Why? Cause if you’re a consumer company and you want to see growth, you’ve gotta be interesting at minimum.

So “you can’t live off your existing community and be cool because if you’re a consumer company, you’ve got to be interesting”. That reasoning doesn’t follow and is incoherent.

Either way, one has to question: Why can’t SoapBox or any other video service besides YouTube be interesting? AltaVista was interesting, Netscape was interesting, The Rolling Stones were interesting. This is classic fad mentality and the science of fads is exactly what is feeding this frenzy and clouding judgment. Buying YouTube would not have made Microsoft instantly cool. I wish that were the case. I wish people would stop judging us by the cool things we purchase. That’s so superficial.

Some flame bait, and I’m biting:

That big audience that Microsoft has? It’s theirs to lose.

That’s unwarranted hyperbole. The MSN network has grown consistently and expanded into other services as I pointed out previously.

As a business we have a due diligence to make money. Maybe we got the valuation on YouTube wrong (things of value: denying the competition, acquiring content, creating PR or becoming cool, revenue projections etc). Or maybe we did not want to engage in yet another bidding war knowing Google’s ability to better monetize YouTube would’ve left us in a trailing position. Those are both intelligible arguments and things I am sure we considered.

Again Scoble is widely read and I hope that his post doesn’t entice a gross underestimation of the MSN community and Microsoft’s position on this. I don’t see us backing down and the video market isn’t running away. We will channel MSN users toward SoapBox when its ripe for the serving much the same way Google channels its users to their Sidebar, Videos, Froogle etc.