Monday, July 07, 2008
Microsoft and Search - The Problem isn't Tech, it's Branding
After being spurned in their first takeover bid for Yahoo!, Microsoft toyed with the idea of acquiring just Yahoo's search assets. Then the whole deal collapsed, only to be resurrected recently with Carl Icahn's interest in pushing out Yahoo's board.
MS' problem with Search isn't technical based, however. It's an issue with their brand. Users trust Yahoo more than Microsoft, just as they trust Google more than Yahoo.
Google earned that trust through fast, accurate search results free from invasive advertisements, and has kept that trust through solid performance over the years. The second-tier search engine providers - Yahoo, Microsoft, and Ask - offer up search results that are roughly equivalent to one another, and at times more relevant and compelling than Google's (more the case for Ask than Yahoo or MS). Again, the problem lies not with technology - for what it's worth, Ask has a very technically compelling user interface and results page for searches, even more so than Google.
It's all about brand perception. MS just isn't trusted. This may stem from the 90's anti-trust debacle; it may stem from users inundated with MS software at work (Outlook, Office, MSIE) who just want a change when they're online; it may stem from MS' recent woes with Vista, previous missteps with Windows 95, 98, ME, 2000 or XP; it might be the shitty job MS does in filtering Spam from its free Hotmail accounts (which Yahoo stinks at filtering as well... really only Gmail keeps its users safe from Spam); it may be a combination of these and myriad other factors.
The point is, simply buying Yahoo or acquiring Yahoo's search assets won't fundamentally change anything for Microsoft's positioning in the search arena. If MS purchases Yahoo's search assets, they'll re-brand them under the MS moniker. All Yahoo would have to do at that point is acquire Ask, and it would continue to be the #2 search provider. Yahoo has a brand that is perceived in a more positive light than MS.
MS' best option would be to either cede the search business altogether, or to quietly acquire another less visible search provider, keep the connection between that 3rd party and MS very, very quiet and maintain the branding separation. For instance, MS could acquire Ask, and keep the Ask branding on that search portal, but push it forward with additional revenue, to expand Ask's indexing and increase its speed. Buying Yahoo, Ask, or any other search property and re-branding it under the MS name basically kills it.
Unfortunately, MS is a technology company run by technologists. They don't understand branding; never have, never will.
MS' problem with Search isn't technical based, however. It's an issue with their brand. Users trust Yahoo more than Microsoft, just as they trust Google more than Yahoo.
Google earned that trust through fast, accurate search results free from invasive advertisements, and has kept that trust through solid performance over the years. The second-tier search engine providers - Yahoo, Microsoft, and Ask - offer up search results that are roughly equivalent to one another, and at times more relevant and compelling than Google's (more the case for Ask than Yahoo or MS). Again, the problem lies not with technology - for what it's worth, Ask has a very technically compelling user interface and results page for searches, even more so than Google.
It's all about brand perception. MS just isn't trusted. This may stem from the 90's anti-trust debacle; it may stem from users inundated with MS software at work (Outlook, Office, MSIE) who just want a change when they're online; it may stem from MS' recent woes with Vista, previous missteps with Windows 95, 98, ME, 2000 or XP; it might be the shitty job MS does in filtering Spam from its free Hotmail accounts (which Yahoo stinks at filtering as well... really only Gmail keeps its users safe from Spam); it may be a combination of these and myriad other factors.
The point is, simply buying Yahoo or acquiring Yahoo's search assets won't fundamentally change anything for Microsoft's positioning in the search arena. If MS purchases Yahoo's search assets, they'll re-brand them under the MS moniker. All Yahoo would have to do at that point is acquire Ask, and it would continue to be the #2 search provider. Yahoo has a brand that is perceived in a more positive light than MS.
MS' best option would be to either cede the search business altogether, or to quietly acquire another less visible search provider, keep the connection between that 3rd party and MS very, very quiet and maintain the branding separation. For instance, MS could acquire Ask, and keep the Ask branding on that search portal, but push it forward with additional revenue, to expand Ask's indexing and increase its speed. Buying Yahoo, Ask, or any other search property and re-branding it under the MS name basically kills it.
Unfortunately, MS is a technology company run by technologists. They don't understand branding; never have, never will.
