Back to the table for another crack at it, Microsoft is finagling to find a way to buy Yahoo's search and advertising business. Lets face it, without Yahoo!, Microsoft has a ginormous mountain to climb to even come close to competing with Google in ad revenues. Yahoo's fallen so far behind Google in search and ad revenues, it would be a nice Jet Assisted Takeoff (JATO) for Microsoft Live Search but there's still a lot of mountain left to climb, and you know Google isn't going to just stand still. Google's making a big push right now to get advertising into the social networking scene. I've been approached through multiple rebrands of the same service that gets Google ads onto blogs. Lets be clear, Microsoft needs Yahoo's search business. I think the latest attempts will be aided by Icahn's shareholder takeover attempts and Microsoft could yet get all of Yahoo.
While the Yahoo war drums start a new beat, Windows Live Chief Kevin Johnson is talking about Microsoft's strategy for winning in the online business. An email memo of Kevin's was leaked that talks about: 1) Consolidate ad platform and win in display, 2) Innovate and disrupt in search, 3) Deliver end-to-end user experiences across PC, phone, and web, and 4) Reinvent portal and social media experiences. Okay, interesting but there's a lot of devil yet to be found in a lot of details. Microsoft's hinting at an announcement this week of some new innovation in their search (technology, presume) so we'll see what that's about in a couple of days.
With or without Yahoo, Microsoft has a lot of work to do just to clean up their own Live branding act, which I blogged about recently. First, lets start with the Live brand name itself. Google is not only a brand, its become a verb. Everybody knows what we mean when someone says, "I'm going to Google that." Live doesn't work as a verb in that way. Can you imaging saying, "I'm going to Live that." Not. Microsoft needs a better name to start with.
Next, Google's made the bar for search very low. What you say? Low? Yes. Google's always maintained a low profile on their search page, giving you just a few buttons and links to select from. Not a lot of junk to get in the way. Live Search has copied this approach but copying Google isn't going to get Microsoft mindshare. The Economist has a article out this week about the Microsoft - Yahoo saga, and I like how they frame the problem; "...nobody has ever been advised "to Live" or "to MSN" a recipe or a cute classmate." Live could be an okay brand for all of Microsoft's online presence but its very much a confused mixture of design by committee branding that it would take a ton of work to untangle it all.
Kevin's memo goes on to list 8 other points about how Microsoft will go about winning at this, from innovating in search - to - expanding targeted relationships. Here's the full list from Kevin's memo published by News.com.
1. Innovate and disrupt in search - We will disclose some elements of our plans with this week's release of search and sharpen our focus on user experience and business model innovation. The work we have done over the last 4 years on search has established a solid foundation to build upon.
2. Win targeted distribution - With this release of search, we are now ready to throttle up broader distribution initiatives.
3. Reinvent portal and deliver new experiences across PC, phone and web - We are building our new releases of Windows 7, Windows Live wave 3, Windows Mobile 7, Internet Explorer 8, Search and MSN with an eye towards optimizing and unifying experiences and scenarios.
4. Fix our online branding - Our brands are fragmented and confusing today, and we recognize a need to clarify and align our online branding. We are now driving forward to address this opportunity.
5. Win in display advertising - We have an advantage in tools, agency assets/relationships and a team laser-focused on capturing the display ad platform opportunity. As we build from a position of strength, we will increase engineering resources to drive even more innovation.
6. Build on our strengths in Europe - As measured by comScore in March, our online business in Europe is doing well. We have over 3 times the page view volume and nearly 7 times the minutes of usage compared to Yahoo!, and 68% reach to internet users throughout Europe. We will double down on our investments in Europe and expand on this strong position.
7. Expand strategic partnerships - In addition to our organic innovation agenda, we will expand strategic partnerships that increase inventory on our display ad platform, enable new paradigms in search and accelerate growth in key geographies.
8. Pursue small, targeted acquisitions - Looking forward, we will focus on small, targeted acquisitions that support our work in search, complement our value in the ad platform and help us grow scale in key geographies. Recent acquisitions including Rapt and YaData are examples of these types of acquisitions.
But without Yahoo, it's a stretch to see Microsoft being able to pull all of this off. Microsoft needs Yahoo, then the next phase of the race with Google can begin.
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