Yesterday, I wrote a post about Microsoft Live Seach Cash Back. Near the end, I ask a simple question that only has complex answers: Why does Microsoft have to play in search at all?
Perhaps the answer is obvious: MONEY. But that is the easy way out. Perhaps there are other obvious answers that I’m eager to listen to. My view is there are tons of ways to make money and Microsoft has some of the strongest (while showing signs of weakness in some cases) revenue streams in their Windows, Office and XBox franchies.
So again, I ask the question: Why does Microsoft have to play in search at all?
Does Microsoft have to play in every arena that is technology-related and has a large market pie? That does not strike me as a good strategic criteria and in the long-term, successful companies are successful by deciding what to do as much as the things to not do. Microsoft has traditionally built an organization that has been able to successfully play in a number of areas due to sheer size, strength, capital and aptitude. I think those days are over, the technology industry is too multifaceted for any one company to have their hands in too many different cookie jars if you want to lead in any.
Google is the leader in search, that is their core. Apple is the leader in digital music device, that is in their core. Why does Microsoft have to be in search with Live/MSN and in digital music device with Zune? Because they can doesn’t see like the right answer and it sometimes feels like that to me.
To be clear, I am not shaking a stick at what Microsoft has accomplished (in anything they do or have done). It is incredible what they have and continue to accomplish, particularly from a revenue perspective. Even what they’ve done online with MSN and Hotmail while I am not a user of either. So it isn’t about that.
It is about my asking what is truly their core business and why not place so much more focus there rather than diversifying into a space like search that I think everyone knows is a much different “kettle of fish.” If they spent their efforts in the core, would they be demonstrating amazing new offerings in the area of online office tools, perhaps even acquired Zoho? Why didn’t they buy Plaxo and integrate it into Outlook (always seems like a not brainer to me) and also consistent with their attempts to grab Xobni.
I don’t know. There seems like a number of angles that Microsoft can compete from its traditional areas of strength to compete in the online world. All this talk about Yahoo! and all of the investment in search is geared towards, well, competing in the search space. But is that necessary when there are so many other (perhaps non-du-jour) areas to play in on the web.
Anyway, just some thoughts… Interested to here what others have to say on the topic, I’m sure the opinions will be passionate and wide-ranging.
UPDATE on Sunday, May 25: Tim O’Reilly has a great and very related post to this one up on his blog. Arrington over at TechCrunch has his own views about the risk to the industry of creating a search monopoly. I’m much more with Tim on this one. There is merit to having competition in search and I have no doubt there will be even if everyone does outsource their search to Google in the short-term. But I don’t see why Microsoft has to be that competition, better to concentrate closer to their core.