May 4, 2006
google’s strength is microsoft’s opportunity
The story here on Bloomberg is a familiar one. Google dominates the Advertising Search market, Microsoft tries to play catch-up with MSN and fails miserably.
Whatever. Google’s neverending dominance can only mean one thing: it will keep raising its prices, slicing value-for-money off the offering, one disgruntled customer at a time. It will, because it can.
So if you can’t be the best, Microsoft, then be cheaper. Therein lies your opportunity. Hey, it worked against Apple.
How can you be cheaper than free?
The reason Microsoft won in the great battles of the 80’s and 90’s was because of its sophisticated distribution and partnership strategy, not because the core MS product was cheaper. While Apple were selling boxes, Microsoft was hosting a whole ecosystem of manufacturers, box-assemblers and software developers.
HOW CAN YOU BE CHEAPER THAN FREE? Reduce hidden costs.
Reduce the time it takes to get up-and-running.
Reduce the time it takes to learn to use the product.
Make the product easier to use, so that its adoption doesn’t add to my workload, forcing me to go from ‘cheerleader’ to ‘coerced unpaid support staff member’.
Make the product better known, so there’s less hassle in selling others on the adoption of the product/service.
Reduce risk, making it easier to switch to the product and switch back from it.
Make the product flexible, so that I don’t lose functionality when I switch.
Make the product reliable. Unreliability costs time, money and sanity. It damages reputations and irritates customers.
Spot on Hugh. MSN is struggling to compete right now. It has less than 3% of the UK search traffic and its declining fast. But one thing MSN is doing well is to make the ad agencies happy by sharing more of their advertising revenue which Google reduced dramtically recently.
I think of Microsoft and Google in the same way as the tortoise and the hare race. Microsoft the tortoise is slow and plodding but it has multiple other revenue streams and they will slowly chip away for years until they catch Google. Gates admitted as much this morning. Just wait for Microsoft Points (digtial currency). That’s when Gates/MSN hands out the candy to the consumers. i.e pays for eyeballs.