December 01, 2008

Why can't Microsoft make money online?

... asks Fortune magazine.


"It's quite possible that Microsoft is going after the Internet with too much energy - or at least attacking in too many directions. Rather than carve out some element of the web where it can shine, Microsoft pursues everything.

Its Live Search competes head-on with Google. MSN and Hotmail do battle, unimpressively, with Yahoo's e-mail service and Google's smaller but innovative Gmail. With recent tweaks to its Windows Live product, Microsoft is mimicking Facebook, in which Microsoft itself invested."

Sounds like a problem of bigness vs. strategic focus:

"For a company that has long been known for the clarity of its message - the old mission statement, 'A computer on every desk and in every home, running Microsoft software' - Microsoft isn't all that clear about what it wants online.

'You've had Ballmer and [chairman Bill] Gates telling the world for years that online success is critical for Microsoft,' says Benjamin Schachter, an online-ad analyst with UBS. 'But they don't say what success is.' "

Real growth is driven by clear, precise goals.

Fortune goes on with the "fear" issue. Fear, fueled by a big bank account, seldom leads to good things:

"In part, that's because Microsoft is so busy playing defense against Google. Yet Microsoft hasn't done a great job with that either. Even as it has spent money on data centers and marketing gimmicks like giving cash back to users of its search engine - the online equivalent of banks handing out toasters for opening accounts - Microsoft continues to lose share to Google.

Microsoft's portion of U.S. search queries was 8.5% in September, according to comScore, down from 10.4% in January 2007. During the same period, Google's share rose from 53% to 63%. And Facebook, MySpace, Google's YouTube, and other, newer sites have reduced MSN to also-ran status in terms of web popularity."

... and there's also the issue of organizational clarity:

"That at least five high-ranking Microsoft executives have a piece of the online portfolio illustrates another part of the company's predicament. Microsoft doesn't speak with one voice when it talks about the Internet."


<< Home

This page is powered by Blogger. Isn't yours?