Just because you suck at something doesn't mean you should automatically give up. I think it's to Microsoft's credit that they're continuing to go after search. And they're making progress with Bing, albeit very slowly. I don't see anyone else attacking Google in search.
I agree. Around 2000, I remember reading all these articles in video game magazines talking about how microsoft will never be a major player in consoles. "Microsoft is not a video game company, its not in their dna". Fast forward a bit and look at the console landscape now. 5.5 million xbox 360s were sold in the 4th quarter of 2009. The xbox can now be considered a runaway success, despite the numerous setbacks that have occured (red ring of death).
With search the landscape is a bit different, but we shouldn't be so shortsighted as to count microsoft out of the game or think that bing will never gain >50% marketshare. We could look at articles like this in 3-4 years and laugh out how off the mark it was, just like the articles in game magazines bashing the xbox in the early 2000's.
Has the Xbox division been profitable over its lifetime? I realize that they are supposedly profitable now, but have their recent profits exceeded the previous losses yet?
I looked into this recently and estimates ranged from $1 to 10 Billion still to go before breaking even. About $5 billion of the variation seemed to hinge on whether the money invested into the first XBox could just be written off which I personally don't think makes much sense so you could say 6 - 10.
The part of Microsoft that makes xbox along with the zine and PC games made a profit of 0.2 Billion this year and 0.5 Billion the year before.
Immediately profitable <> successful. They're pushing console gaming to the next level, and you can bet that their next iteration will be wildly popular. Turning a huge profit at the expense of not providing significant value is how to remove yourself from future competition.
you can bet that their next iteration will be wildly popular
No, you really can't.
Look at PS3 compared to PS2, GameCube versus nintendo 64, Saturn versus megadrive.
In fact it's practically an industry rule that you always fail after a successful generation of console! A betting man would reckon on the Xbox 3 being a flop.
I wouldn't bet on it being a flop. In my opinion, the only unsuccessful Nintendo console was GameCube. NES, SNES, N64, Wii, all a success. PS1 was a success, so was PS2. I'm not really convinced of this industry rule you're talking about.
Wii reached an audience no console ever reached, thanks to the titles and controllers. I'm betting Project Natal will take over a big slice of that market, unless Nintendo really steps it up.
Cash flow positive business are destined to become profitable in the long run. But even if the division weren't cash flow positive, it'd still be a pretty good bet by Microsoft. They've successfully locked down a place in my living room that they didn't seem to have a chance at 10 years ago.
I have to disagree on this one. Everyone I know with a Xbox 360 has them in their livingroom, hooked up to a big-ass HDTV.
Ofcourse you can attribute that to my age, and the fact that I don't know too many teenagers, but for the teens in my family, if they are gamers at all, what they have is a PC in their bedroom. Console-gaming is if not exclusively at least largely a social thing, and thus makes more sense to have in a room made for socializing.
While my argument isn't backed by solid data and mostly relies on my own experiences, you can't really claim yours is any better either.
As for as the Xbox 360 goes right now it is a massive success. It is one of the top three consoles in a market where there used to only be two. That's big achievement in itself.
I guess the iPhone must be an abject failure then! After all, Nokia's 3300 series has sold over 200 million of those phones. So it's clear there's only one winner in the mobile phone market!
Please, if you're going to compare numbers, be aware of what you're comparing. The Wii, Xbox360 and PS3 are only similar if you're an outsider and can't realize the apple to oranges comparison that's taking place.
The Wii's major feature is that it's a family entertainment system and not a gaming console. The reason it's sold so much is because, as many others have stated, it managed to breach into new market segments. Yet when I talk with any person that dedicates a significant portion of their time to playing games (ie a gamer) they never talk about the Wii, they talk about the Modern Warfare 2, PS3 and Xbox360.
A good part of why the XBOX 360 has done well as a gaming platform is because they were able to leverage the success of the PC as a gaming platform. Of gaming platforms, the PC has been one of the most open and easiest to develop for on the market and a lot of that has carried over to the XBOX.
On the other hand, do big companies ever get BETTER at something?
Large companies tend to walk off their own skyscrapers. Microsoft toppled IBM with the "PC on every desk" mantra. In turn, Microsoft never won on the Internet, because they just never understood that humans network. Phone+cable+Internet companies are begging for a sassy upstart to eat their lunch when competition opens up. American car companies missed game-changing trends in consumer automobiles towards fuel efficiency.
Should Microsoft abandon search? Probably not, but they're more likely to make money if they attack markets that only have awful products. Attacking a market with strong loyalties and gold-standard type products seems like a fool's errand
as said in the article, attacking Google in search is not going to get them anywhere. Facebook, or Apple, or Nokia (with its free GPS service on its smartphones) may steal a bit (or a lot, perhaps) of the show from Google, but I doubt Microsoft ever will.
But why? Really, is there any fundamental reason we should expect Google to remain perpetually on top of the search engine business?
I think the difference in quality between Google and Bing search results is negligible; at this point it's just a matter of mindshare as to whether people, on average, go to www.google.com or to www.bing.com when they want to look something up. There's no vendor lock-in propping up Google, to the extent that there is behind the Windows or iTunes monopolies. Mindshare can be altered, Microsoft just needs to figure out how to do it.
"But why? Really, is there any fundamental reason we should expect Google to remain perpetually on top of the search engine business?"
In technology, it is rare that a leader loses it's place in the market. More often, a new technology is pioneered by a new company that makes the old technology less relevant.
IBM never lost the mainframe market, but did not dominate the PC market. Google did not take over PCs, but dominates search. There are many more examples like this.
While not explicit in the parent post, I think his major point was about a leader in a mature technology field not often being replaced.
Google supplanted Altavista largely because they made huge strides in a rather new field. While it's definitely possible, it's a little hard to image someone coming along with a web search that's impressive enough to supplant Google. It's more likely that "search" would evolve into something not entirely comparable to today's search, and replace them.
For starters, Google mints its own money via Adwords, while Microsoft still depends on Yahoo Overture, which Yahoo itself (and everybody else in the industry) acknowledged being greatly inferior to Adwords, to the point that they wanted to use Adwords to make more money out of the Long Tail of search...
I don't expect Google to remain perpetually on top of the search engine business. But neither do I believe that Microsoft, as we know it today, is capable of being the company that knocks them down.
On ask.com I have to scroll the page to even reach the first organic result after the block of sponsored results. If you use it on a regular basis, don't you get tired of doing that?
Bit of a baity article insofar as MS can't "admit" they suck at the web and it would be suicide if they gave up on it.
I have a question regarding Bing, though. A while back, someone here made a suggestion that struck me as brilliant: that Bing provide an option to exclude web pages with Adsense ads on them from search results. This would get rid of untold jungles of webspam and deprive Google of revenue at the same time. Of course it would also exclude many legitimate pages, but webspam has turned into such a horrible problem that at this point I just don't care (especially if the filter were an option I could turn on and off). If MS did this, I would use Bing regularly. I can't think of any other reason to say that.
My question is: what besides accusations of anti-competitive behavior (which strike me as rather weak in this case, MS being far from the monopolist in search) would prevent MS from trying this?
Yes, but pages with Adsense ads on them are of poorer average quality (I'm guessing) because there is so much spam. Google have an obvious conflict of interest preventing them from doing much about this. That conflict of interest is just about my only real grievance with Google; I'm otherwise a happy Google user with no incentive to switch. Why wouldn't MS exploit this? The suggestion isn't that they suppress Adsense pages altogether, just provide an option to filter them out.
According to the graph in the article they actually made profit in 2004 and 2005 and only a small loss in 06..
I'll admit some of the web products suck (hotmail?) but not bing, they haven't been able to profit from it. I guess currently they are after marketshare rather than profits. Think of it like a startup burning through some initial VC money to get customers except that they have a lot of money to burn!
Disclaimer: They pay my bills, but am not really a fanboy just not anti-microsoft.
My point is simply that you can't generalize and say MS sucks at web because they've had no success at search - they have multiple platforms that are or are close to market leaders, just not search.
Can you imagine anyone writing about how Google should just admit they suck at web because they (also) only have a few actually-significant properties on the web?
There's 3 MS and 5 Google properties on this page of the top 20 web properties according to Alexa -
http://www.alexa.com/topsites
Neither sucks at web as a whole. But MS sucks at trying to dislodge Google from search and Google sucks at being anything but search (and YouTube, which was already massively successful when they bought it).
Ok, but who, other than Google, does actually make a lot of money on the web? Yahoo is struggling and most of what they offer is generic crap monetizing their old brand.
I have no idea whether Facebook makes any money. It can't be easy judging by their desperate attempts to trick users into doing things that are bad for them.
Twitter should make tons of money considering their service is trivial (I know it's not trivial to operate at that scale) and their mindshare huge. But how much money do they make?
Content creators like journalists, authors or musicians find it very difficult to make money as well.
Amazon does make money, but they are a retailer, not a web company I would say.
In my view, it's an open question whether the ad funded web is a viable business model for a lot of companies or just a niche in which very very few big players make all the money.
Microsoft always seems to need one or two attempts before they make a really good product. Win95 -> WinME -> WinXP. Zune -> Zune2. Vista -> 7. They may not be as agile as Google, but a lot of smart people work at MS. I hope they succeed with good search. Google needs some competition.
Pretty much everyone I met at Microsoft was very smart. But at least within my division, the available energy was never utilized very effectively. I always compared it to a muscle car, sure that V8 has a lot of power, but boy that car can't handle for anything.
With that said, you just can't apply blanket statements to the company. "Microsoft isn't good at the web" just doesn't really mean anything. The Bing team is for all intents and purposes, a completely different company from the IE team, from the Xbox and Zune teams from DevDiv... How a given team at MS does largely depends on how effective its management is. Some teams have really effective managers, PMs, and developers that can execute. Others don't. There is very little (almost none) energy, process or direction that gets applied across the entire company.
"[...] the available energy was never utilized very effectively"
Doesn't that apply to all big corporations to some degree? I think it's a tradeoff between using each individual's potential and utilizing economies of scale. The latter requires coordination of many people, which reduces the leeway for all individuals involved.
Corporate culture is certainly important, but no corporate culture can completely overcome the limitations imposed by utilizing size. At least that's what the ad-hoc scientist in my head says, you know, the one that never reveals any sources ;-)
"Does Microsoft not realize that all the spoils of the mobile web are going to the companies that control the front-end interface — that is, the big mobile OS players like Android and iPhone and not the fringe players like Windows Mobile?"
Sounds like what folks said about desktops in the late 90s. History tells us that the device/PC ends up simply being a way to access the web. Sure, there are always some intensive apps that require the local cpu, but those are rarely for the mass market.
