Microsoft analyst day was last week, and they, like Yahoo, have started to move beyond pure search and have instead started to focus on how they can make it easier for consumers to access and manipulate information. Or, as Yusuf Mehdi titled his section, Information Services.
The interesting things called out by MicrosoftWatch and MicrosoftMonitor were Microsoft's focus on social networking, blogs and messaging. In fact, MM states
I also expect huge emphasis on social networking, which will be more than about consumer communications. I would watch for informational and services ties to Office or Windows, which would could be used, for starters, for creating separate work and home social networks.
Blake tipped off some of what is coming, starting with a new MSN Messenger product that isn't yet in beta. Among other new features the software will offer basic document sharing--a shared spaced. Microsoft first popularized the concept with SharePoint Portal services. Several people can share these folders, which update for all the users as content is added, deleted or changed.
Why is this important? It's becoming clearer and clearer that Yahoo and MSN are realizing that playing they "innovation" game with Google is a fool's errand. The costs are high, and it's unclear that all this innovation is really what will drive the business. Clearly, it's not what will drive high margin business. How much R&D budget is being sucked up at these companies so that they can have a product that is at parity? And can consumers really tell that Google is better than Yahoo which is better than MSN? Or do consumers respond on a more emotional basis? Do they just like Google better than MSN? Or Yahoo better than Google?
Well, if - from a consumer perspective - algorithmic search has become commoditized and it's really all about the packaging, Yahoo! and MSN are clearly starting to chart a course by which they can have really good, valuable packaging.
Yahoo is taking the tack that it's not about the results, it's about the question. What's that mean? It means that Yahoo has decided to turn it's focus onto the person doing the seeking. Sure, they'll still invest in finding the right answer, but what they really want to do is understand the actual question. Yahoo building and acquiring services that allow consumers to invest in the Yahoo network - Flickr, MyWeb 2.0, Yahoo 360, Konfabulator, the soon to be rolled out Yahoo Mail (courtesy of OddPost). Even if you choose not to invest personal information into the Yahoo Network, Yahoo's still got a service to help understand your intent: Yahoo Mindset.
Microsoft seems to be taking a slightly different approach - though, since nothing's really rolled out, this is all speculative. From what I'm reading, Microsoft is pushing its tools toward collaboration and productivity (see Yusuf Mehdhi's powerpoint here). This idea isn't so far fetched: it both embodies some of the spirit of Web 2.0 and CTO Ray Ozzie's Groove Networks. It also leverages Microsofts core productivity tools in Office and merges them with Internet, Messenger and potentially mobile based access platforms. This is very much in line with the approach Microsoft has taken with .Net.
What's MSN's approach got to do with search and media? Well, search seems pretty straightforward - and if it wasn't before Google launched it's desktop search, it sure is now. Media? Well, Gates has never made a secret of the fact that he thinks of Microsoft as a software company. It's unclear to me that Microsoft looks at the advertising business as any more than a monetization engine. Instead of selling software, Microsoft now will sell ads on that software. But, when it comes to building relationships with brand advertisers and understanding the business of their advertisers, while I'm sure MSN will try as hard as it can, I just don't think Microsoft - as an overall company - is in that business. This, in the end, may be what gives Yahoo a leg up in this race.
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