My favourite of Apple's many jabs at Microsoft came in 2004, at
the launch of OS X 10.4: "Redmond, start your photocopiers."
Few things illustrate the company's latter-day lack of vision
better than its efforts to pursue Yahoo, beginning with a
breathtaking $44bn buyout offer in February 2008, and culminating
(for now) with a deal whereby Yahoo agrees to use Microsoft's
search engine in exchange for various sweeteners. It was lucky for
Microsoft that Yahoo's Jerry Yang rejected the initial offer; the
new agreement makes more sense.
But why did the company ever contemplate so huge a spend on a
declining icon of the web? "Google's dominance of search and search
advertising continues to grow," says
the official web site set up to announce the deal. "This lack
of competition in search poses risks to consumers, advertisers, web
publishers, and the entire Internet." Nervous words; and Microsoft
seems convinced that it has to break Google's grip on search in
order to thrive.
The reasoning goes something like this. Through search, Google
has achieved three key business advantages. First, it is the
world's portal to the Web. In Google Chrome, the difference between
searching and browsing the web all-but disappears into a single
"omnibox". Second, it dominates search advertising, and
advertising is the commercial engine of the Web. Third, by
observing what people click, Google has access to data which it can
use to improve its products. These are real advantages, which
Microsoft wants to match.
Unfortunately Microsoft's response over the last few years has
been desperately lacking in imagination. Once, the company could
trounce a competitor by doing something similar and building it
into Windows or Office. Those days are gone, especially on the Web,
yet we have seen Live Maps vs Google Maps, Soapbox vs YouTube (a
particularly dismal example), and the Live Search team trying
everything: imitating Google's sparse interface, buying users with
cashbacks, launching Bing with many features that were also in
Google if you knew where to look, and now buying a sliver of market
share from Yahoo.
Microsoft's mapping technology is actually high quality, and Bing
is a worthy search engine. What is obvious though is that
disrupting the market will require something different, not the
same kind of thing done just about as well.
There are even clues about what that different thing might look
like. Twitter betters Google for certain kinds of search, and the
next generation is likely to blend social media and the real-time
web with traditional indexes. Ironically, Yahoo has some
interesting ideas along these lines, which are now under threat.
"Five years from now, ten years from now, [search is] going to look
very different than it does today. It will become more
personalized, it will become more social," said co-founder David
Filo at Yahoo Hack Day in London last May, where the company
demonstrated some of the technology that might drive it.
Is it possible that Yahoo's imagination combined with
Microsoft's resources might bring about genuine innovation in
search? It is possible, but looking at Redmond's track record, hard
to imagine.