How can Microsoft, a company which is synonymous with computers and technology, be losing this badly? Danny Sullivan has done some historical analysis on the above mentioned numbers and there is no doubt that Microsoft is slowly slipping into search oblivion.

What is the difference between Google and Microsoft? Both companies need to use scientific notation to keep track of their net incomes, so what gives?

I don't want to oversimplify the problem, but to me there are two main reasons why Google is laughing and Microsoft is, well, not.

Microsoft is used to their traditional business model where they have the monopoly on the user. Look at the world of Operating System (OS) and the Office Productivity Tools. Of course Microsoft doesn't like to use market share and monopoly as synonymous, but let's call spade a spade and say that is how things were for Microsoft. Enter search.

In search there is no monopoly, the user is in the driver's seat. At any given moment the user is only 1 click away from leaving their search engine and moving on to the competition.

Google understood this from the very start. Eric Schmidt, Google's CEO, understands the tenuous nature of the search landscape. Eric, hence Google, understands that their product (search engine) and the distribution channel (the Internet) do not accommodate a monopoly.

What is Google�s secret?

In one word, the answer would have to be 'innovation'. Google became an expert at scaling its innovation. They know the key is not to produce products which will change the world, but to produce a lot of products quickly, and notice when something works; then collectively change the world through mass adoption.

At a glance, this approach of innovation driven market retention sounds simple, but it has been eluding Microsoft since the day they entered the search landscape. As simple as it may sound, Microsoft still tries to capture the user by offering them IE 7. Tisk tisk.

In fact, Microsoft, who started their meteoric rise by being the most innovative worker bee - whether it be through improving on Xerox or Apple, they mandated the cutting edge. But now, they play catch up at all levels, not just search. Zune is an attempt to capture a market that Apple defined. IE7 is an attempt to recapture a market that Mozilla is well on its way to stealing out from under them. I've tried Vista and the beta Office; honestly, there is nothing new there that has me tremendously excited. Nothing that is going to revolutionize business or streamline efficiencies - break down any communication barriers, or allow me to connect with my audience any easier. Basically, I have a new interface to become familiar with. Don't get me wrong, some of the gadgets are cool, but not enough for me to upgrade the entire office.

In a nutshell, Microsoft has become the overweight system, too worried about status quo to drive innovative thinking. Thinking that they have to always release a complete solution rather than little innovations - the only problem is that by the time they actually release the complete solution, usually Google and others have released enough patches and tools to make Microsoft's marvel obsolete before it arrives in stores. Both, because people don't need it any more (problem has already been solved), or it just isn't innovative (even if they in fact started the programming long before anyone else had).

During one of the many interviews at the last years SES in London, Larry Page and Eric Schmidt stated that Google is planning on releasing more products, little downloads to fix your immediate pains, or just cool tools to make working a little more dynamic and interesting. Just enough to keep the brand growing, give the WOM momentum.

The only option for Microsoft?

Size has its benefits, and maybe Microsoft really needs to change the way it thinks, rather than trying to be the spry and quick one, it is about time that they admit that they are a whale and leverage that size. Stop dividing up the brand into neat little silos, focus on actionable tasks with long-term solutions at the end, this may mean a complete shift in current corporate culture, by releasing products quickly and not loosing momentum to long R&D timelines; and buy Yahoo! and/or AOL.


Tom Abramowski
Organic Search Marketing Strategist
Search Engine Positioning by Searchengineposition
Enquiro Full Service Search Engine Marketing

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