Microsoft’s strength is its greatest weakness

Henry Blodget, mostly known for being spectacularly wrong during the dot-com bubble of the early 2000s, and the Silicon Alley Insider have decided to put the pen to the tablet (so to speak) and talk about how Microsoft is prepared. to take advantage. current weakness in the stock market. This is likely due to the observation that Yahoo can now be acquired for much cheaper than the $30 a share it was trading last summer. In fact, that may be true, but Microsoft has a history of completely screwing up any online initiative they try. So far it has been a complete money pit for them with no end in sight.

To understand Microsoft and online, you have to understand that they got into the online business thanks to AOL. MSN was originally designed to protect your Windows business from the threat of dial-up services and a potential (but never materialized) Netscape/AOL combination. MSN built online properties entirely on AOL’s walled garden model. They were manic about making sure Internet Explorer (Spryglass browser) was preloaded on every PC. Anyone who disagreed was threatened with revoking their Windows (read Compaq) license.

AOL once had a vision of turning the Windows desktop into an operating system layer from which the AOL client that you get from the ubiquitous supermarket CDROMs runs from. However, perhaps fortunately, those ideas did not come to fruition as people began to choose Internet connectivity and the Google search page as the de facto standard for Internet commerce.

Fast forward to 2008, AOL is no longer relevant, now relegated to the elderly and very rural areas. MSN is still fully embroiled in past battles, unable to become relevant to today’s Facebook youth. MSN is like a Soviet-era airport terminal, still trying to sell 3-day-old bagels and warmed up with Fogers coffee. Among Dick Clarke’s fake burger joints are newsstands trying to sell him imitation Burberry, Viagra, and offers to wire millions of Nigerian oil (AOL has at least had a coat of paint). MSN isn’t so much a destination as a necessary stop for some on their trips to Google goodness.

Google Apps comes along, and Microsoft suddenly has the threat they thought would materialize in the year 2000. Their answer is Windows Live. Amazon Clouds arrives and its answer is Azure. Microsoft’s fundamental response to any online initiative is to copy. In other words, Microsoft’s total online strategy is to respond to perceived and real threats, not to create truly innovative products and services that people want, but to build on this rickety MSN and trap people from the default homepage of IE, you are too inexperienced to find your way out.

And herein lies the problem that Microsoft has. As long as their entire motivation is to protect the Windows/Office franchise, they will never succeed in incorporating true innovation into their products, and their competitors are free to outperform them.

Their real dilemma is that they see their customers as Windows/Office users who need extra things they can’t get from Microsoft, rather than people who need a problem solved.

If they need guidance, they just need to look at Xerox, Digital Equipment, Shugart, Hayes Modems, 3Com, Palm…