Why exactly does Microsoft care about search?
Microsoft is a software company. Sure, it has made forays into hardware (keyboards, mice, joysticks, and the ever-semi-popular Xbox), on-line services (the ever-semi-popular MSN.com) and information delivery (the ever semi-popular MSNBC).
What pays the bills is the sale of software licenses. Microsoft is a software company.
So why Bing.com and the Yahoo! acquisition-turned-joint-venture?
Certainly not because Microsoft “has to compete with Google on Search.” Microsoft’s entire history shows a leadership that embraces the proposition that business is war, and is remarkably canny at it.
Canny generals choose their enemies and fields of battle wisely.
Google has been encroaching on Microsoft’s turf by offering a steady stream of free applications – in particular, Google Office. It’s utterly useless for serious business use, rendering documents even less accurately than Open Office. Many consumers, though, find Free! an attractive enough feature to outweigh the suite’s limitations. And unlike Open Office’s intimidating-to-consumers open-sourceness, Google’s image suggests simplicity and ease of use.
As things stand, Microsoft’s lost license revenue is barely even a rounding error. But unlike Open Office’s hapless “owners,” the people running Google are very driven, and think in terms of competing and winning. So if you’re Steve Ballmer you aren’t looking at the current, limited product. You’re thinking ahead to the end-game.
Google’s product managers certainly recognize that for business customers, the lack of flawless document interchange with MS Office is a deal-breaker. Ballmer has to figure they’ll focus on this, and eventually offer a Professional Edition that isn’t free and is a very interesting alternative for a great many CIOs. Serious office suite competition won’t be good for Microsoft’s margins.
Ballmer is a tested general on the battlefield of business competition. He has to recognize that Google has chosen this field of battle, and on it Microsoft loses even if it wins, because Microsoft is a software company and depends on licenses for revenue. Free isn’t an option.
What does he do? First, he understands his enemy.
Boiled down to its essence, Google is a media company. It tosses chum (its free stuff) into the Internet waters, waits for us fish to show up, nets us (no pun intended), and sells us to advertisers, making large profits as it does so. It reinvests some of those profits in the creation of more chum.
That’s what Google Office is, chum. It’s chum.
Which explains Yahoo!/Bing.com.
With Yahoo!, Bing.com’s search engine doesn’t have to be better than Google’s. Just as good is just fine, because just as good means Yahoo!/Bing.com provides a site that will be more appealing than Google to a subset of Google’s current audience. Where Google provides more free applications and cool stuff; Yahoo! provides more and deeper content – a characteristic that becomes increasingly interesting to information consumers as traditional newspapers eliminate through budget-cutting the one differentiator they used to have: Fact-checkers.
And every pair of eyeballs that prefers Yahoo!/Bing to what Google has to offer reduces Google’s ability to invest in more chum.
Viewed in this light, Microsoft’s investments in Bing.com and the Yahoo! alliance make sense. It’s a flank attack that will be hard for Google to ignore and harder for it to counter – the exact advantage Google has over Microsoft with Google Office.
There is, of course, another question: Why do you care? This analysis is, after all, equivalent to a football commentator explaining why it’s important for a team to establish its running game, namely, to take the pressure off its receivers.
The answer gets back to the suggestion made last week – that CIOs need to take the Cloud seriously, and not because it has any immediate potential for replacing existing IT infrastructure (Limitation #142: Do you think an Infrastructure as a Service vendor will regression-test your applications when it makes an upgrade, or that it will submit its upgrade plans to your ITIL-conforming Change Control Board?).
CIOs need to consider the Cloud in the context of competitive strategies and tactics. I offer the above as an example of this kind of thinking.
The Cloud’s most interesting immediate value is to provide a catalog of newly feasible capabilities your company can use to gain competitive advantage. Last week’s column mentioned Google Maps as an example. You might also include YouTube and Hulu in your thinking. What else? How should I know? It’s your business. Think in terms of conveniences your customers might appreciate that none of your toughest competitors currently give them.
They don’t have to be big. Just nifty, easy to add, and useful. Call it Niftiness as a Service (NaaS).
It has a certain ring, don’t you think?
Yahoo is just as good?
I have not used YAHOO to do any searching in *AGES*. I do use YAHOO Groups quite a bit.
Whenever I tried YAHOO their garbage return is just that garbage. Google has won. Hey its free and free from ads.
Ed
“Call it Niftiness as a Service (NaaS).”
What a NaaSty suggestion.
“It’s utterly useless for serious business use, rendering documents even less accurately than Open Office”
I’m not sure I understand. Both products seem to process their inputs well. Google Office is more limited than Open Office. Are you grumbling that Open Office sometimes fails to import an MS Office document properly? That happens to me rarely, less than once a year.
How well does MS Office do importing an Open Office document?
I’ve never had a problem with exporting an Open Office document into an MS Office format. I do still have MS Office 2000 around, but I mostly use Open Office and am getting along fine. (My word processing needs are pretty simple, but I do put demands on my spreadsheets.)
Like it or not, MS Office sets the standard. Open Office processes MS Office documents fine, which is to say it doesn’t crash or corrupt the files. It does not preserve MS Office formatting perfectly; sometimes it isn’t even close. Google’s office suite is even worse.
For anyone in business who has to exchange documents with clients who rely on MS Office, reasonably good rendering is nowhere near good enough, and the ability to “round trip” a document without changing it is vital.