Microsoft is the world’s largest and most successful software company for the last 2 decades, but something has changed after Google’s success. Microsoft has always wanted to join the Internet Market, however they simply can’t become successful on the net. Maybe Microsoft was afraid of Google, the search engine giant.
Microsoft Online Business Service Department, the department with Search Engine, Advertisement Marketing Service and MSN Messenger, etc, has released their report on finance. According to the report, I can see that the total loss hovers around US$471 million, but last year, the total loss is only $247 million. We all can see that Microsoft invested a huge amount of money on the Internet. Guess what, the total amount of investments about Internet is an astounding sum of US$8 billion! Microsoft seems to have not much luck on the Internet, so why have they lost so much?
Factor 1: Failure in acquiring Yahoo!
Search Engine can be a powerful tool for Microsoft to compete with Google, and Yahoo! is the only suitable one. If Microsoft acquires Yahoo! successfully, the situation of Microsoft would be much better. I still remember that after Google was launched, Microsoft co-operated with Inktomi and Overture (GoTo.com), and both of them had been acquired by Yahoo! after Microsoft’s co-operation. That means that Microsoft was depending on Yahoo! to provide search service, until 2005. We can see that Microsoft used to be successful on Internet just because of the co-operation with Yahoo, but not MSN Search or Live.com.
The failure in acquiring Yahoo! is, of course, unexpected. Microsoft used to have the chance, but they gave up, that a not wise choice, I think.
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Factor 2: Failure in acquiring Social Website – Facebook
Microsoft used to have the chance to acquire social website Facebook, too. But for now they are co-operating, and this status is doesn’t seems to be too good, because Microsoft already has MSN Space and Social Networks. Microsoft has a little share of Facebook, obviously, that’s not enough. If Microsoft can acquire Facebook, then now Microsoft can have a successful website finally, at least.
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Factor 3: Too many competitors
As Microsoft is a typical late comer, it has too many competitors. Hotmail – GMail and Yahoo! Mail. MSN – Yahoo! Messenger, QQ and GTalk. Live.com – Google, Yahoo! Search. Live Spaces – MySpace, Facebook. How can Microsoft win? Nearly every product is an imitation! They simply just copy the features and use the huge market share in PCs to fight. Also, they do not have a good business model, I hate advertisements, but they appear in almost Microsoft websites.
I cannot imagine how Microsoft can win without any creative ideas, that’s really terrible for a company which wanted to join Internet Market, especially for a late comer.
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Factor 4: Softwares are limiting themselves
I can say that, without Internet Explorer, the Internet life can be 10 times better. I believe that Microsoft can feel the pressure about IE, because Microsoft have to consider a lot about the compatibility of their official website. IE never obeys W3C Standard. Of course, Microsoft can just design webpages for IE, but without displaying on other browsers, how can Microsoft gain users from Macintosh and Linux? If Microsoft design webpages for W3C Standard, they everything cannot display well in IE, that’s more terrible, right?
The base of Internet is web browser, if Microsoft cannot develop a standard web browser, that can be a real threat of Microsoft, I think that Microsoft do not want to let IE be an only way to visit Microsoft websites. Now, I can really feel the terrible web design problems for IE, and I got a bad experience to visit Live.com in Safari just now.
From the 4 factors, we can see that Microsoft is only good at softwares, but really bad at Internet. Microsoft has lots of cash in their deep pockets, but they never use it to acquire successful Internet companies, they just based on their abilities develop themselves, and also develop for themselves, now Microsoft have to use the desktop market share to control. Can you imagine that the future of Internet without the desktop market share of Microsoft? Without IE, MSN in Windows, many users will use Firefox and AIM instead, and they won’t use web services provided by Microsoft.