Screaming Penguin - Source Does Matter

Salon has a recent article about Microsofts latest efforts to revamp the behemoth's Internet strategy. This is an area where Microsoft, quite frankly, has been a miserable failure. The article gives breif mention to one important fact -- Microsoft is the only company out there that can afford to make billion dollar misteps over and over -- but overlooks one important aspect, namely Microsoft's seeming inability to compete in a truely fair market.Microsoft's revenue of US$19 billion and change last year was mostly from the sale of its operating systems (US$8.5B) and productivity apps (US$8.8B). I don't know about other numbers, but I would imagine the ubiquitous Microsoft mouse, and the admittedly great Microsoft keyboard, as well as their other "hardware" products make up a big chunk of that remainder. MSN, as an ISP is an insignifigant blip compared to the user base of AOL or Earthlink/Mindspring. MSN, while one of the most visited sites on the web has nowhere near the "sticky" value of a Yahoo, or even Netcenter. Microsoft's ill advised subscription strategy for Slate a while back seems to have driven a couple of nails into its coffin. There have been some notable successes: Expedia is generally the highest reguarded travel site out there. CarPoint is gaining ground. They have also flat bought some very successful sites: LinkExchange which is still chugging along very successfully, Hotmail which they may be running into the ground. All in all, the business of "pure" Internet products, however, has left a very bitter taste in Microsoft's collective mouth, and will likely continue to do so.Point One: Should Microsoft get it together, it will almost certainly represent an anti trust issue. Without the wellspring of cash that is Windows/Office, Microsoft as an Internet company would have been out of buisiness years ago. While their merging of the MSN/WebTV/WindowsCE product groups seems to cure a schizo problem for the company in product focus, it is generally too little too late, and in many ways, a nod off to Larry Ellison being right about the network computer concept, however, their past behaviour to burry all the NC-oriented plans of hardware and software companies over the past three years leads one to suspect that they were simply buring the competition in order to dominate the marketspace themselves. Further, many of their potential success is tied to the browser which is tied to their operating system. Given their impending defeat before the "Browser Warcrimes tribunal", it would not seems to far fetched to have the DOJ barking at them for their services sector.Point Two: Microsoft just can't hack fighting a fight where they don't walk in with the edge. From the time when Microsoft bought QDOS and got the OS outsale from IBM (also the result of antitrust litigation), they have entered every single fight they have been in with an edge. Their illicit behaviour bundling and dumping the early versions of Office all but annihilated Word Perfect and Lotus, and put WordStar into an early grave. They won't be able to replicate this success online, simply because the everage user DOES know how to swap products-- simply type www.yahoo.com into their web browser. AOL, for all that I hate them, has a great service for people who don't understand and don't care to understand what an ISP is. The Sony PS2 and the Sega Dreamcast including browser support are going to push internet devices into the homes of the rest of the "technology friendly" population that don't already own a computer. They may see moderate success getting WinCE into set top boxes from cable companies, but the cable industry is looking more and more to Sun because they know nobody cares what brand of hardware and software their stuff has, they just want cheap and reliable -- two areas that a not Microsoft's forte' right now. Where Bill and Balmer go now is very important to Microsoft's future. perhaps it is better for the Linux community if they squander their signifigant brainpower persuing areas they cannot win in, leaving less time to fight the rising Open Source tide. Either way, it is my opinion that this is a lost cause for Microsoft, and mainly because they have never had to fight in a truely competitive space without everyone else "bringing a knife to a gunfight" as it were.