YaBook won’t solve Microsofts problems

Speculation is rife about what Microsoft is going to do to meet the growing challenge from online against its core desktop assets. Some suggest that Microsoft may be out to buy not only the search business from Yahoo! (which Yahoo! in effect declared bankrupt anyway) but also Facebook.

The tech news in itself is not the interesting part here. The interesting part is to examine what would happen with these assets, if they indeed came under the Microsoft umbrella, and how users would respond to it.

Let’s look at search first. As I stated Yahoo! has more or less declared bankruptcy on this one, ever since they started to approach Google for a search-deal in order to fend the Microsoft take-over bid off. Now, with that being the case, how would Yahoo!’s assets fare with Microsoft’s assets in the search space? It’s a very good question.

Microsoft has a lousy track record in the search game, and even though I have high regard for Satya Nadella, who is driving the R&D of the Microsoft search business (he’s one of the most intelligent guys, I think I’ve ever met), I’m just not confident they can succeed. Not on the merits anyway. They may gain some sympathy as being the only defacto alternative to Google, but this is hardly a winning strategy for Microsoft.

As for Facebook I think this may be an even worse bet for Microsoft for a couple of reasons.

First of all, social networking users are less than loyal. Yes, you got all your friends on Facebook, and that makes it a pain to switch to the new flavour of the month. But it won’t make it impossible. Import features keep getting better all the time. So the question is whether you think the savvy users would stick around, if Steve Ballmer takes the overall helm from Mark Zuckerberg? Somehow I don’t really see that happening.

Second, there’s still no viable business model for Facebook. So while users will be fleeing out the door, Microsoft will struggle in order to monetize on the users left. These will get alienated and also head for the exit. Thus Microsoft will be left with a network with hardly any nodes. And that is an extremely poor way of trying to get back, what is likely to be a hefty acquisition price, if such a deal should ever happen.

All in all, Microsoft desperately needs a strong online play - and fast. Only trouble is that noone (well, perhaps except for Google…) really fits the bill. It’s definately going to be a struggle up hill.

Vad NU! is a consultancy company owned by Mads Kristensen and specialized in helping clients take advantage of the business opportunities created by new media. Click to learn how I can help you and your company.