Billionaires Summer Camp: Google, Facebook, Microsoft Get Together & Roast Marshmallows

Summer Camp for billionaires happened this week in the middle of Idaho. For the ‘geographically challenged’, Idaho is somewhere due east from San Francisco. But what happens when you get over a dozen billionaires such as Bill Gates, Google’s Eric Schmidt, DELL’s Michael Dell and others in the Idaho wilds? The odd thing is not much it seems. That’s what happened this year at an exclusive retreat for the media moguls and tech titans who spent a week in Sun Valley, Idaho, trying to figure out just what everyone else in the room was doing.

Sun Valley is a town in Idaho where every year for the past 27 years the investment bank Allen & Company has invited media and technology CEOs and founders to get together to socialize and network with each other. The idea is this can lead to deals. Sometimes it does.

The event this year was like Texas Hold ‘Em poker game with a lot of poker faces sitting around the table, few hands shown and chips not put on the table. In past years this annual event spawned a slate of mergers and acquisitions, speculation and buzz. This year seemed to be more of a “wait and see” and “you go first” environment from what I can tell.

Facebook founder Mark Zuckerburg was there. As was Twitter co-founder Evan Williams who may have been looking for a buyer for the company (unofficially of course). New AOL honcho Tim Armstrong (formerly of Google) popped up. Sony CEO Howard Stringer put things in perspective when he said Twitter was a company he didn’t want to acquire. A company with little or no revenue? “not a club I want to join.”

From my perspective the larger observation is that the U.S. financial market isn’t where it needs to be in helping new companies grow and be successful. Events like Sun Valley are the epitome of the availability of capital and debt to accommodate mergers and acquisitions. The market for initial public offerings in the U.S. has been hampered by over-regulation. Ironically, some of the only companies to go public in the U.S. this year have been from China.

On the debt side, private equity overtapped the debt markets for several years to acquire assets they had no right buying, from retail to manufacturing. Combined with housing, mortgage and other debt weakness, the debt markets are not as able as they should be to finance the kind of mega-merger that a conference like Sun Valley should announce.

In lieu of that, here’s the announcements I would have liked to have seen come out of Sun Valley this year:

Google buys Facebook. There was no Google-Facebook deal. Although Facebook is much more valuable than YouTube to Google in my strategic long-term observation. With Facebook, Google gets the real-time user opinion of over 200 million users + billions of user photos uploaded monthly + profiles full of personal data + a social network winner.  My prediction: Google could make an offer for Facebook for $15 billion cash and stock within 12 months. We’ll see.

Microsoft buys Twitter. There was no Microsoft-Twitter deal (not yet anyway. My bet is Microsoft could acquire Twitter within 6 months for about $750 million. Why? Twitter has no revenue but does have a user base that Microsoft needs to differentiate its search from Google). Twitter is the new PR platform and usenet groups for today’s thumb-happy crowd (mobile users).

Time Warner spins out AOL. AOL is trying to rejigger after a disastrous 10 years under Time Warner in a failed merger. Coincidentally, in 1996 I said AOL wanted to be Yahoo when AOL  grew up. Well, AOL is finally web-based but still looking for a grown-up self. The cable companies and telcos are the new on-ramps, where does that leave AOL? Destination? AOL’s instant messenger service AIM is the jewel, along with Advertising.com. AIM is the largest “real-time Web” conversation.

Remember in the movie when Forrest Gump opened a box of chocolates and said he never knew what he was gonna get inside. Well, one of the biggest missing ingredients at Sun Valley this year was not only action but mobile industry mavens.

For all the talk about media, the real platform that most media and tech titans ought to be focused on is mobile. Mobile is bigger than PC, TV, print, broadcast. Mobile is the new Holy Grail of media. Ask any 10-year old what they’d rather do: watch TV, read a book, listen to radio or play their Nintendo DS or PSP. Increasingly, another game option is iPhone. What do they want for birthday? an iPhone or iPod Touch, or Nintendo DSi.

The real story about media this year is that Apple with its mobile-centric product line looks more like the future than anyone talked about at Sun Valley. And Steve Jobs wasn’t even there. Roasted marshmallows anyone?