20501034 - Entry 9

MS!
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Orignial Article
'Inside Microsoft's War Against Google'
by Greene, BusinessWeek's Seattle bureau chief.
(http://www.businessweek.com/magazine/content/08_20/b4084036492860_page_4.htm)
2008. 5. 8

Summary

Nicholas Utton, chief marketing officer at online broker E*Trade said that “When it comes to internet search sites advertising, Microsoft is way behind front-runner Google.” He also mentioned that Microsoft isn’t getting much of search engine dollar. However, Steven A. Ballmer, Microsoft CEO had begun laying the groundwork for a strategy to compete with Google in online advertising. He states a reason that Microsoft should compete in internet search site advertising; Consumers and businesses increasingly are switching from desktop software like Microsoft’s to free online services that do the same things.
Google is taking in 77% of the revenues from text ads that show up in internet search engine. Meanwhile Microsoft is getting only 5% of it. However, Microsoft has competitive advantages in the display business that has a lot of potential to grow in the future.

My opinion

I think Microsoft should think more about what they could do the best or at least better. In the book “Re-imagine”, Tom Peters show the IBM as a wonderful business model. IBM searched about what they are good at and how they are going to maximize the profit out of it. IBM was famous as a computer manufacturer but now they are transformed as a solution company. IBM found there was no future in computer manufacturing business due to stiff competition with China. China could make PC with much cheaper price than IBM and computer manufacturing business doesn’t require much high technology. IBM sold and got rid of every single department that was regarded to be no more profitable. Then they promoted solution business as their star business.
However, Microsoft is trying to compete with Google in internet search engine advertising field. Everybody knows that Google is the best in internet search engine advertising field and it’s their home. Microsoft doesn’t need to play away match. I think Microsoft must find what they could do the best in ad-related business and bring Google in their home field. Fortunately, Microsoft is good at display advertising business which is already verified as the ‘Question mark’(Wild cat).
What Microsoft should do at this moment is to make internet search engine ad obsolete as fast as possible and encourage people to consider display business as a more up-to-date means of advertising.