Why Microsoft Needs Yahoo…

I was reading the comments in this article today and could not resist observing (once more) how bloggers and anonymous commenters love to pretend they know Microsoft’s business better then Microsoft *knows it itself*.

I think the real question here is why has Microsoft been unsuccessful in dominating this area of [internet search] business. Right? After all, this is what everyone agrees on — that Microsoft has failed here.

But have they?…

If you take the time to try Live Search, you’ll know it’s just as good as Google Search.

The problem here is not with better algorithms or a bigger database, but rather with consumer perception.

Consumers *have* made up their minds (< one of a thousand examples) that Google is king of internet search. And any decent marketer will tell you that once a consumer has made up his mind, it is impossible to change his notion from that point forward.

*It is that simple.*

Live Search can never compete with Google Search directly.

The above is a failed strategy. It’s just like Google Knol trying to compete with Wikipedia (fail!). It’s just not going to happen unless they are prepared to spend 100s of millions on marketing and the next 10 years slowly leaching away at the user base of whoever is #1.

There are only two ways Microsoft can win market share here: buy another major Search company such as Yahoo (to get their users and brand), or compete with Google search on different attributes.

And this is exactly what they have been trying to do, as everything else is a dead end. And of course with some creative marketing thrown in, they can attack Google on all fronts.

Update: Just take a look a Bing! Fantastic strategy on their part. Rebranding (of Live Search) and marketing at work creating a clean slate in the consumer’s mind.

Bing

Bing is a search engine that finds and organizes the answers you need so you can make faster, more informed decisions.

vs. Google

Enables users to search the Web, Usenet, and images. Features include PageRank, caching and translation of results, and an option to find similar pages.

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