Microsoft to ‘Innovate and Disrupt in Search’–Again

May 19, 2008

My newsreader popped this info tart in front of me this morning: “Kevin Johnson’s Memo On Yahoo & Their Strategy”. The focus of Gigaom’s Web log post is a memo, allegedly by Kevin Johnson. By the time you read this, my pathetic posting will be very old news. You need to read the memo and determine for yourself it it’s the real deal.

I’m commenting because of a series of emails I exchanged this morning about Microsoft’s search strategy. Among the points I made to the eager journalist who was, as my mother used to say, an empty vessel:

  1. Microsoft is implementing reactions, not a strategy. The cause of these knee-jerk reactions: mostly the Google and a business model challenge. Cloud services are coming round the mountain, and Microsoft can hear the whistle blowing.
  2. Yahoo has some sharp people and a truck load of search systems–Inktomi, Stata Labs, (provided by Fast Search & Transfer), Flickr’s system, Overture’s search, and more). I’ve been told the company is rushing to be more like Google, which is not perfect, obviously. But Yahoo is grossly heterogeneous, and Google is more homogeneous in architecture.
  3. Google keeps on grinding forward. In Israel a day ago, Mr. Brin referenced Google’s multi dimensional database progress. My sources tell me that it is not progress; it is a leap frog play.

So “innovate and disrupt in search” is going to boil down to tackling these problems, forcefully, squarely, and well.

First, how many search platforms will Microsoft support? SharePoint, whizzy technology from Microsoft Research, Fast Search & Transfer’s ESP, and the legacy systems that just won’t die. Each search platform is a money hog. Get too many of these critters chomping on the cash, and you will be one poor data farmer.

Second, if–and this is a big if–Microsoft cuts a deal with Yahoo, exactly how will two shot up World War I biplanes contend with Google’s F-35? Time is running out because the GOOG keeps gobbling market and mind share. It is the number one site on the Internet and the world’s top brand. Quite a one-two punch for piston powered aircraft to shoot down.

Third, Google’s business model is based on advertising. Google wants to diversify, and Mr. Brin’s comments in Israel a day ago suggest that he wants to put a rocket booster on Google Apps. Interest in cloud-based services continues to creep up, and Google is in a good position to innovate and disrupt in that sector. The company already is innovating and disrupting in search.

We’re watching a clash of cultures and business models. When Microsoft swizzled IBM in the 1980s, it was clever. Google’s not just clever; Google has the technical platform to redefine search and enterprise applications.

Mr. Johnson’s memo does little to convince me that Microsoft–with or without Yahoo–can do much to stop Googzilla from doing Googzilla-type things.

Stephen Arnold, May 19, 2008


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