As a curtain raiser for CES, John Markoff gives the ever morphing MSFT strategy w/r/t search/MSN a good once over in light of recent video/access/search biz model shifts.
From the piece: The Microsoft executive who heads the MSN service, Yusuf Mehdi, said that Microsoft generated $1 billion annually in online advertising revenue and saw growth opportunities in creating a Yahoo-style Web portal and Google-style search-based advertising.
For more context, here are columns I wrote on both MSFT’s search strategies and video/advertising strategies…
Microsoft may prove the market for ad-supported Web video, but will all but surely lose it.
Briefly:
The killer app will be a sitcom that showcases the making of good jobs for Americans, by showcasing — and hence hastening — the buildout of the fledgling market for customized lifelong learning and career services (CLLCS).
The first customers of savvy ‘1.0’ CLLCS providers will be private equity firms that specialize in turnarounds. The CLLCS providers will supply the PE firms with workers who are plug-and-produce when parachuted into a distressed acquisition.
In these distressed, now debt-laden companies, bonuses are tied to the generation of free cash flow.
Non-zero software line items reduce free cash flow — and hence bonuses.
Bye-bye Microsoft. Hello open source software.
Going forward, the objective of the PE firms is to return refurbished acquistions to the public markets.
Which forces competitors to adapt.
Now the uber-performance-based compensation model and maximum use of open source IT infrastructure becomes foundational for all credibly sustainable companies in the sector.
And this plays out in sector after sector.
Think MSFT will broadcast this show? Not likely.
Think people will watch a showcase of such portentous doings? And that is funny, to boot?
Hello AOL, Yahoo, etc. …
Of course, these CLLCS provider-PE firm partnerships will be the scourge of all consistently underperforming companies, many of which may advertise on AOL(-TW properties), Yahoo, etc.
So the sitcom (and its complements/spinoffs) may come to life through a wholly new web site-as-distribution channel…