David Kirkpatrick on Brainstorm: TECH, His Book, Facebook and Microsoft 4

By Kyle Austin

Tomorrow marks the kick-off of Fortune Brainstorm: TECH (AKA: David Kirkpatrick’s conference) in Half Moon Bay, California. Many in the industry believe that it will be the best technology conference of the year and with a speaker list that includes Mark Zuckerberg, Eric Schmidt, Nicholas Negroponte and even Neil Young (yes the musician) – who can argue.

Fortune has turned the conference circuit into big business and gives the conference major editorial billing thanks to Kirkpatrick’s influence over the magazine. Fortune’s special Tech issue, on newsstands now, takes a deep look at those that will be on hand at the conference. RaceTalk got a chance to sit down with Kirkpatrick late last week to preview the conference, chat broadly on the technology industry and discuss his upcoming book on Facebook.

RaceTalk: So is this the calm before the storm (Brainstorm: TECH)?

DK: It’s pretty calm. The problem we have now, so far (knock on wood, that it’s not people dropping out as speakers), are people who forgot to register and are now begging to come as attendees.

We have a PR person who says “Our CEO (of a fairly major tech company) wants to have an in-house PR handler come with him.” I’m thinking this guy (CEO), isn’t even a speaker and I look and he’s not even registered as an attendee.

It’s great though, they all want to come. They sign-up, then they back out and then they want to come again.

RaceTalk: Well it’s good that I got on the list early. I’m excited to take it all in next week. I’m really looking forward to your conversation with Nicholas Negroponte of One Laptop per Child and the “How Net Content will be Monetized” round table that eHarmony’s CEO Greg Waldorf will be on with Neil Ashe of CBS Interactive and Robert Glaser of RealNetworks.

DK: That’s great. Glad you’re going to be making it out.

RaceTalk: So, for your last “column” you asked everyone that was coming to Brainstorm: TECH to discuss their thoughts on the most exciting innovation in the technology space, what their biggest hope or fear for the future is / how tech relates to it and what should the top priority be for the next U.S. President. I was hoping you’d take a stab at answering your own questions for me?

DK: Did you see their answers?

RaceTalk: Yes, they had some great answers.

DK: I continue to think that social networking and social media at large is the biggest innovation over the last twelve months. The addition of automation to human communication has really occurred over the last five years but it has really been significantly augmented over the last 12 months.

Let me bring a little twist to that as well. Since so many of the Brainstorm: TECH attendees did say that the iPhone was the biggest innovation over the last twelve months, it also ties in. I think what you are seeing with the applications on the iPhone is a huge innovation. I’m sure more of those will be social applications that will incorporate location into the communication which they facilitate between people. Basically the iPhone 3G has three basic qualities: it’s 3G, it has GPS and it has applications – that are very easy to download. It’s the first time you’ve ever had a really easy way to get sophisticated applications on a mobile device, period. That is a huge leap forward from the first version of the iPhone, which only had a very constrained group of applications – or they were put on there illegally.

RaceTalk: I heard they sold 1 million last weekend, did you get one?

DK: I bet that is true, I got one.

Social networking, which will then be combined with the ability to put applications on mobile devices – In the new simple way that the iPhone 3G demonstrates – that is big. Social networking is different because the software makes connections for you (with other people) when it’s working in its highest level of sophistication – as it does on Facebook.

RaceTalk: What is your biggest hope for the world and how does technology fit into it?

DK: My biggest hope for the world is that the poor of the world, who are increasing their aspirations for a better standard of living, will find technology tools that will help them make a rapid transition from illiteracy, economic health and information deprivation. Technology will make a big difference there. Mobile technology and wireless technology are making a huge difference there already and are very promising.

RaceTalk: What should be the top priority for the next U.S. President? – That was another one of your questions.

DK: It was interesting – if you read my column – how many of those priorities sounded like they should be the top priority. It only makes you realize how many priorities have been abandoned or mishandled by our current administration.

I would say the single biggest priority is thinking through the integration of the U.S. with the rest of the world and conveying that understanding to the American people. I think the American people (In general), are really misinformed about the depth of their own economic integration with the rest of the planet – which is already real. However, most Americans deny or disregard it.

RaceTalk: Let’s get to your book. Can you tell us a little bit about it? It’s called the Facebook Effect from what I’ve read and aiming for September of 09’?

DK: That is a bit optimistic. I’m hoping to get it out in the fall of 09’. The book industry, its wheels turn slowly. Simon & Schuster is publishing it. Got the signed contract in hand – just got that yesterday – so that’s very exciting. It is going to look at the history of Facebook but the real intention is to explain what I started to describe earlier. I want to illustrate how there is a new kind of communication arising, as a result of what is popularly described as “Web 2.0” or “social media,” and that it is profoundly transformative.

It takes us beyond the era of email to something new. It is the new killer application for the Internet. The killer application up to now has been email and the Web. Social media uses the Web to create a much more sophisticated set of connections between people that allows a whole new set of things to happen in society between people; which I don’t think is yet fully appreciated. I think Facebook is the product or business that is most fully realizing that.

RaceTalk: I saw your one piece on Jeremy Burton and Serena software and how they are using Facebook for a collaborative R&D culture. Are there other ways you’ve seen so far in your research where companies are using Facebook to affect the bottom line? Different types of social networking?

DK: Social networking as a concept still goes against the grain of the impulses of most modern managers. For all the verbiage to the contrary, they are still oriented to the top-down hierarchal structure. Only the smartest companies are willing to experiment with the true empowerment that social media represents. I think you will start to see that companies are performing better when they empower employees with these new tools. Whether it’s Facebook or something else that makes it happen – I don’t know.

The single best example that I’ve seen on how Facebook creates fundamentally new opportunities for society was the demonstration in Columbia last year, where 4.8 million people went into the streets to protest FARC – in the largest demonstration in the history of the country. It happened one month to the day the first message was put on Facebook by a simple 30-something programmer who had the idea. He got it all started on Facebook by himself and it mushroomed into 4.8 million people in the streets one month later – and that’s largely due to the viral power of Facebook.

RaceTalk: Wow that’s interesting. So you also said that you’re going to take a look at the history of Facbook. So are Mark Zuckerberg and Sheryl Sandberg giving you carte blanche access to the company?

DK: I have total access and they are very much behind it and excited about it. It’s not their idea, it was my idea, but they are enthusiastically helping and participating.

RaceTalk: I was talking with Steve Levy a couple days ago and he’s pursuing a book on Google – will you be comparing notes on the access you’re getting?

DK: I’m sure I’ll get much better access.

RaceTalk: I’ve seen some of your latest columns on Microsoft and moving on after Gates’ retirement. It was interesting that you were taking the stance that Microsoft is still better positioned in the marketplace as a technology company then Google.

DK: I think Microsoft is a more successful well-rounded technology business then Google is. Google is a stock market phenomenon on one brilliantly managed business. But that business is not impervious to competition. Just like in all things, diversification is the best way to avoid risk. Google does not have a diversified risk portfolio. Microsoft does. Given the respective valuations, Microsoft is a far better risk for an investor (in my opinion) then Google. I think that Google is brilliantly managed company, managing a marketplace for advertising using search. They’ve done an extremely good job maintaining that.

However, I don’t think they have proven themselves to be a durable, continually innovative technology company – at least not yet. Microsoft has been challenged on the innovation front but they have succeeded in creating a wide variety of new successful businesses.

RaceTalk: I know we had talked about this awhile back, and your thought was “There is no way Microsoft is not going to get Yahoo!.” Do you still feel that way?

DK: I wouldn’t say there is no way. I would say they desperately want it and predicted they would get it. I wouldn’t’ say there is no way. Microsoft has mishandled the process so badly and it has been such a comedy of errors for Microsoft, Yahoo! and now Carl Ichan. I wouldn’t say anything is easy to foresee. They’re doing such a bad job managing this negotiation. Microsoft badly wants Yahoo!’s search and they need it.

RaceTalk: Out of all the people that are going out to Brainstorm: TECH, who are you most looking forward to running into or interviewing.

DK: I’m not interviewing him, because I generously passed him along to my bosses’ boss, but Neil Young is who I’m most excited about. John Huey, Editor-in-Chief at TIME, is interviewing him and he closes out the conference. You knew that right though?

RaceTalk: I think I knew that.

DK: Out of the ones I’m interviewing I’m excited for all of them: Jeff Bezos, Eric Schmidt and Nicholas Negroponte.

RaceTalk: Cool. So in general you are excited about Brainstorm: TECH and it sounds like you are planning to make this an annual thing?

DK: I think it is the best technology conference of the year and I think that will be proven true.

RaceTalk: Sounds like it’s well on its way. So you’re taking a leave when you get back for your book?

DK: Yes, I’m taking a leave August 1st.

RaceTalk: Well thanks for your time David, good luck next week and hopefully I run into you there.

DK: Thanks Kyle.

Disclaimer: One Laptop per Child and eHarmony are clients of the Racepoint Group.

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