Is Redmond the next Detroit?

There is more talk about the deals Microsoft recently brought to the public to increase market share for its Windows Live search product. The slump, or depending on whom you ask outright failure, of the Windows Live brand comes from several sources. One is marketing. Microsoft spent millions on marketing, but the services of Live cannot compete with Yahoo and Google. Both Google and Yahoo are making changes and adding new aspects to their search offerings. They are expanding to the mobile markets; the advertising is also geared to results that are more relevant to the context of the entered search.

Another aspect is user expectations. Search engines are a major part of how things are done on the web. Robert Scoble, of Scobleizer, demonstrated how the different search leaders handle related content and results. He searched for a simple term “Palo Alto notary” to locate a notary in his local area. Google gave the correct information needed, and both Google and Yahoo added maps to show the exact location of the notary needed. Windows Live was not even close according to Scoble.

Scoble also points out that the advertising shown on the results pages were different for each of the three engines. Yahoo and Google had slightly different results, but both gave not only relevant search results but also the advertisements on the results pages were focused to the search. Searching on Windows Live shows no local hits, as Google and Yahoo did, and the advertisements are not even remotely close to the search term. The example from following the same search shows this. The top sponsored link in the Windows Live result, actually points to another search site. The other sponsors are hotel related.

Users of search engines demand that results be relevant, and marketers who pay to have advertisements shown, will only pay if the ads shown will actually give them a chance to earn clicks and business. When ads are sporadic, and have little in relation to the results, marketers see this as wasted money. This could be one reason why Microsoft is loosing the “search wars."

To combat this, they have recently signed a deal with Lenovo that will place its Windows Live offerings on all new laptops sold by the company. This OEM deal will help Microsoft gain users, but only if they actually use the pre-installed software. Another deal is one that is causing some backlash for Microsoft. The “bribe” like offerings that will pay companies in Microsoft credit for using Windows Live on their entire network as default for searching and browsing is another way Microsoft is hoping to leverage their user base and convert them in to potential consumers for their advertisers.

Microsoft is reported to have said they were “in it to win” concerning Windows Live being the flagship search product on the web. Steve Ballmer drew heat when speaking in his recent criticisms of Google. Ballmer spoke at Stanford about Windows Live and the business goals for Microsoft. Calling Google’s business plan to double in a year insane, raised doubt as to how he can call something that works insane when his own product is failing. Scoble had some comments on Ballmer’s Stanford talk as well.

“You’re up against a formidable competitor and one you’ve never seen before that has some real, significant weapons that you can’t deal with (and YouTube isn’t even close to it.) This isn’t Netscape you’re talking trash to, Steve. Have you really studied Google? It doesn’t sound like you have.” –Robert Scoble

So is Microsoft going to come out of this slump? Will Detroit? As they stand now the answer is a resounding no. Microsoft has yet to offer something that is on par or better than its competition. As long as Yahoo and Google keep offering what users, and marketers want, and on top of that adding new services and features to their online presence, Microsoft will always be playing a game of follow the leader. Think Ford. Think Edsel.

http://tech.monstersandcritics.com/news/article_1279526.php/Windows_Live_struggles_for_market_share__Second_Roundup_