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Microsoft and Live Search – When the Rich Get Desperate

posted on May 26, 2008


There’s no need to beat around the bush: what do you, as an Internet user, think about when someone mentions the word “search”? You most likely think about Google and, why not, Yahoo! may also be on your mind.

Microsoft’s Live Search has started out as something they considered extremely promising but, unfortunately, things didn’t exactly turn out the way these folks would have liked them to. Let’s face it: as far as search is concerned, Live Search doesn’t represent anything, especially if you were to compare it to the big G.

Under such circumstances, we have the following scenario: a company with a lot of money on their hands (Microsoft) sees that one of its projects is as close to becoming a flop as it gets. And, with all of the possibilities out there, they choose to go with what clearly represents a pathetic attempt at bribery.

If your project is so bad that you have to bribe people to use it, doesn’t that mean that it’s back to the drawing board? It seems that the folks over at Microsoft see things differently and they actually think that bribing people with a couple of bucks (literally) represents a viable long-term approach.

If your product is bad, if the brand is bad and if everything else which has to do with it is just plain bad or, in other words, if the foundation of the project is a shaky one to begin with, wouldn’t going directly to the core of the issue be a wiser approach? Apparently, that is not the case, at least as far as Microsoft is concerned.

Can they actually achieve some worthwhile results by living in denial and trying to hide all of their problems behind an insignificant bribe? If any of the fundamental rules and business principles apply (and you can rest assured that they do), then let’s just say that everything will backfire.

Have they managed to solve their problems through this bribe? Have they managed to convince people to stop using Google and use their product in order to save a couple of bucks? Of course not and, in the end, the only thing they’ve managed to do is paint a clear picture of what the rich try to do when they become as desperate as it gets.

Best wishes,

Alan Johnson


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  • http://www.strategicmarketingmontreal.ca/otherbb/ Barry Welford

    So true, Alan. I think the problem is that many people think that price or giving away discounts is a marketing lever that is easily available. To my mind it’s a two-edged sword. Only if you’re Walmart and have a real cost advantage can you use it consistently. For the rest of us, you’ve got to get the price right, but stay away from it as a lever. Your product/service must have its own attraction independent of price to really grow.

    Barry Welford’s last blog post..Tags Attract Eyes

  • http://andybeard.eu/ Andy Beard

    Every article I have read on this topic is missing something, though I might have missed some discussion, especially Danny on the Gillmor Gang.

    Google’s alternative to his new Microsoft offering is Froogle which isn’t that much of a success either.

    Offering a product search with some added incentive such as coupons is something that some people will like, especially people in Microsoft’s core audience (the people still using IE because it came with their computer). It isn’t a bad bet, especially as Microsoft didn’t develop it themselves.

    It can be monetized, as many coupon offers are for affiliates.

    Google can’t really compete on this directly with Microsoft, as Google needs content owners to be happy, and such a search engine cuts into the bottom line of content producers monetizing with CPA offers, or Adsense which is also full of CPA.

    Andy Beard’s last blog post..How To Find FriendFeed Rooms With Google

  • Stuart King

    Another problem I see is that the people who use this service to save a couple of bucks might be less likely to pay for things that advertisers are trying to sell. Microsoft might end up lowering the value of the service to advertisers.

  • http://www.greatpriceshere.com Nicole

    I still have IE which came pre-installed in my PC. I hardly ever use it but, occasionally, there are sites that respond to IE faster than google, particularly some online shops. But mostly, IE is as good as a waste. I certainly will not change whole sale for a few coupons.

    Nicole’s last blog post..Discounted Kids Toys

  • http://www.futurefactory-software.com Musashi

    One word is very important in your post: “insignificant”.
    Everyone has its price and can be pribed, but I can’t imagine that many people are that cheap.

  • http://foolishmumbles.com Top Rated

    If any company is good at dealing with flops, it’s Microsoft. While I agree, their current “bribery” attempt is not going to work. They’ll figure something else out. Their best best I think, is to continue pursuing Yahoo. The combined market share and technologies of the two of them is the only thing that has a chance at competing with Googles search product.

    Top Rated’s last blog post..My Six Word Memoir

  • slaatch

    Alan-
    I like how you frame Live Search Cashback as nothing more than a bribe while conveniently neglecting to offer any background on this program coming from Microsoft’s acquisition of Jellyfish last fall. Jellyfish was an online shopping/advertising social network, so if Microsoft is looking to integrate that network while also driving new users, what better place than live.com. So either you didn’t research the background/history or just chose not to include the full story in your hit piece. I’m guessing you didn’t do the research because you never refer to Jellyfish.

  • http://exposedseo@gmail.com seo dude

    What was the recent action film which had MSN live phone boxes in it? I cant remember the name :( Anyhow… I doubt it is going to happen. In fact Live search was such a failure an average user don’t even know about the whole MSN to Live move.

  • Niaz

    This Johnson guy is talking like he is the best anti-MS analyst out there. The fact of the matter is Microsoft will become a bigger company than Google on the net. Everytime they enter a new market, be it OS, IE, Database, Business, XBOX they always undercut the prices to build market share. They roll out bad products for a few years until they finally click. Look at SQL Server for example, it took them ten years to catch upto Oracle in terms of technology and marketshare. Until they caught up, they just keep prices low. Take MS Dynamics competing with SAP, Oracle in the ERP Business segment today. Five years they didnt have such a division itself and people were laughing at them for entering into it.

    Now MS has 10% of search market share, so they have nothing to lose by trying different ideas rather than sit in the corner and cry. If only 5% of people are bribed, your market share jumps to 15%, you acquire Yahoo and you move to 35%, acquire AOL and Ask and its 45%, meanwhile they promised to roll out new features every six months which could again bring you in competition with Google.

    MS is a smart company, they look at ten year strategy, not like whacky pundits like Johnson who has no long term vision.

  • http://www.evawhite.com Eva White

    The sheer laziness of most users keeps IE on their comps and as their primary net access. While I still use IE I dont think being bribed is going to make me prefer using Live Search to Google.

    Eva White’s last blog post..Why Oil Prices Are Not Going To Fall……

  • http://www.sitevisibility.co.uk Eloi

    I don’t agree with Alan at all, at am starting to wonder whether some people are being offered privileges for down talking MSN… I mean come on: bribery?? Essentially, this is a great thing from the user’s point of view: Don’t have to do anything and you get a discount!
    Nias is right, MSN is doing good catching up on Google, and I know Yahoo is strong in the states, but here in the UK, MSN has much better performance both for advertisers and searchers…

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  • http://premiernetclicks.com Steven Balusik

    The interesting part of this discussion is why Microsoft has missed the boat on this. Just as MR. Alan Johnston pointed out, Live search does not represent anything. This is not so much an actual product problem but a PR problem. And, with Microsoft’s advertising budget, that is truly baffling.

  • Michael Milne

    Didn’t Nielson recently find that 26% of internet users didn’t know what Google was? Lots of room for MS Live growth. There is a reason we get dozens of “you win a million if you send me the tax money on your winnings” spam email a day.

  • http://www.strategicmarketingmontreal.ca/otherbb/ Barry Welford

    @Steven Balusik – What counts, Steven, is not how much effort and money Microsoft has put into pushing the new brand, Live, alongside the ongoing brand, MSN Search, but rather the perceptions that build up in the minds of potential searchers. Even Microsofties don’t seem to understand the distinction between the two brands. All Microsoft has done is spend a great deal of money to spread confusion.

    Barry Welford’s last blog post..Tags Attract Eyes

  • http://premiernetclicks.com Steven Balusik

    @Barry Welford – No question about that Barry. My point was, with that kind of money at their disposal, you think they could have come up with a successful branding angle. I can think of quite a few companies that not only did not have exceptional products, but had inferior products who used advertising campaigns to sell themselves to the top of thier industries. How can such a prominant company so obviously lack perspective and vision. They could easily just hire the finest ad agencies in the world to tell them what to do if they can’t figure it out themselves.

  • http://www.strategicmarketingmontreal.ca/otherbb/ Barry Welford

    Steven, IMHO the problem in large organizations is often how to get Focus, Focus, Focus through consensus. If someone powerful felt it was important to keep Live a-live, then who wants to take that fight on. Or perhaps that powerful person wanted to keep MSN around for old times sake. After all, some dinosaurs had two brains, one at the front end and one at the back, I believe. Perhaps one of the reasons dinosaurs died out. :)

    Barry Welford’s last blog post..Tags Attract Eyes

  • Valerie

    Quite frankly, I agree with your article. However, I recall back in 1995 – Bill Gates had said at a prominent conference that the Internet was a “Joke”. Of course, this was to promote Windows 95 and the security of their business model. For you see it is with this type of leadership the reason why Microsoft is unable to compete with the new landscape and continues to play “Catch-up” with innovative companies of today. Microsoft has proven they are not innovative, at best a great imitators – they are not even good investors as they attempt to acquire other web based businesses. As the Jurassic dinosaurs, so to will Microsoft become extinct – it is inevitable.

  • Valerie

    Regarding comments of Mr. Welford and Mr. Balusik, both excellent points. Focus is key and I strongly believe the Antitrust committee was right on track by theorizing a break-up of the company’s business units. Having said, a break-up of the business units would have been the best move for Microsoft as it would have forced concentration, focus and agility of each business unit within specific sectors of each new and emerging market, rather than trying to move a weathered supertanker through a waterway – it just doesn’t work.

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  • http://www.deemx.com DeeMX

    Google in teh se niche as Microsoft in the OS niche. Microsoft is too late to get this niche.

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