Microsoft … The Aging Elephant

In Fast Company’s November 2011 issue, I ran across the front page/feature article: “The Great Tech War of 2012. Apple, Facebook, Google, and Amazon, battle for the future of the innovation economy,” and I came to realize that Microsoft is content with being an aging elephant in the presence of lions, young and old.

I’m surprised at the length of time Microsoft has kept CEO Steve Ballmer at the helm of the company – especially since he hasn’t made any bold moves as CEO.

Microsoft’s failed attempt to purchasing Yahoo! Was a blessing in disguise – especially since they were able to take control of Yahoo!’s search engine in a favorable deal (partnership).

Instead of creating their own social network Microsoft has invested hundreds of millions of dollars into strengthening Facebook. And to boot, Microsoft spent billions of dollars to acquire Skype, and integrated Skype into Facebook’s network.

Maybe I’m wrong about Microsoft’s equity stake in Facebook, or maybe I’m right, in thinking that Microsoft should’ve invested all of those millions of dollars into creating their own social network.

Looking at the investment’s appreciation since the time of the initial investment to now, such an investment has been profitable. However, such a profit fails in comparison, to the value gained if Microsoft could’ve used such money invested to create a successful social network of their own.

Instead of pursuing a central social strategy that is in mouse, Microsoft has pretty much given up on a social strategy of its own, and has focused its attention on strengthening Facebook’s standing as the dominate social network.

Microsoft not only integrated Skype into Facebook, but has also tied Facebook’s data into its search engine results. Both instances show Microsoft’s short sighted view, when it comes to the overall importance that social connections will play in the future of business.

The boldest/smartest move CEO Ballmer could make would be to sell Microsoft’s equity stake in Facebook and to use its strengths (work force, cash, etc.) and social friendly businesses (Skype, Xbox Live, Bing, etc.) to create its own network.

I can understand how a person could come to believe that Facebook is too dominating to be overtaken. Yet, I know that Facebook has yet to deliver a game changing feature to sufficiently secure its number one position as the dominate social network. Therefore, the future of social networking is up for grabs.

If I had Microsoft’s resources I would be able to crush Facebook, and make its future history a reflection of Friendster’s and MySpace’s.

I applaud Google’s attempt at creating a viable social network (Google+) to compete with Facebook. But I’m in the belief that Google is to focused on search and mobile to adequately focus on social.

If Microsoft fails to pursue its own social network, it will miss out on the greatest business opportunity that currently exists.

The first thing I would do is create a killer feature that would give individuals a reason to sign up on a newly created network, and to make it addictive enough to keep returning. (Note: I already have a concept for such a feature).

I would also create/ build virtual mine malls as a physical/ bricks – and – mortar presence, where people could buy the latest electronics, play virtual arcades, and so forth.

I would also create areas where companies could test products and /or hand out samples, conduct surveys, etc. However, all of such activity would be done in a non-intrusive fashion.

Microsoft can remain an aging elephant by failing to take advantage of Facebook’s missteps. Or, on the contrary, Microsoft can rejuvenate its self by creating a disruptive/revolutionary social network, and return to its prime as the leader of the pack.

More / Better Placement Ads Would Equal Less Commercials

– Placement ads that are included into the content of T.V. shows, talk shows, etc. are normally either lost in and /or divided by all the surrounding content, or are presented in a non-impressive way.

– I feel as though T.V. shows should have placement ads that highlight the product that is being advertised, in a way in which the product seems to jump out from all the visual and verbal clutter on the T.V. screen. In other words, every time a placement ad is being shown on a T. V. screen, the entire T.V. screen should turn black and white, and the only thing that should be shown in color is the product that is being advertised.

– As soon as the product placement spot ends, the entire T.V. screen should return to normal, and show everything in color.

– Such a product placement strategy would work perfectly in certain circumstances and with certain products. For example, vehicles would fit perfectly into such an ad strategy. Because such an ad strategy would be as disruptive to the content of the show, if it is deployed by way of showing a highlighted vehicle during a street scene.

– Know, such a strategy wouldn’t work in a lot of instances…such as with the American Idol Coke placement ads, or the X-Factor Pepsi placement ads, unless such a strategy was deployed sparingly (just at the beginning and end of the broadcast, etc.).

– There are other creative ways to creatively deploy placement ads. Yet, I’ll close on such a note, for the time being.

The Reasons Behind Ning.Com’s Original Strategy Failure…

-By allowing anyone to create their own mini social network free of charge, the creators of ning.com believed that such a strategy would become a run away hit.

– What the creators failed to factor into such a strategy, was the fact that most people wouldn’t want to spend much time on generic personal social sites, when they were already members of the most popular general social net-works, and popular niche networks.

– Once the creators noticed that such a strategy wasn’t feasible for the company for the long haul, they decided to do away with the free strategy and replace it with a fee strategy.

– The fee strategy, does bring in more revenue than the free (ad supported) strategy. However, ever since such a network focused on their current fee strategy, they have failed to seek out meaningful innovation.

– I still believe that the for free strategy would have been, and would be useful in certain areas – especially when it comes to gaming. However, such a strategy would’ve had to have a slightly different system.

– Instead of a single minded focus on a social strategy, ning.com could’ve focused on a gaming strategy, in which individuals build personal teams within their own social/gaming spheres.

– The most obvious ways to generate revenue off of such a social/gaming strategy, would be through sponsored competitions, virtual item sells, general ads, etc. Yet, there are other revenue streams that could easily be tapped through the creation of relevant features… features that would perfectly fit into the structure of existing social and/or gaming networks with the proper system…

– Even a company like Microsoft could easily enter the social network race, with an initial push that would intergrate their x-box live feature into a relevant and innovative social platform.

– In sum, I believe ning.com’s founders gave up on figuring out a relevant/profitable free strategy too soon. Yet, I realize that they still have time to build a free strategy system that would initially complement their current fee strategy- especially since the free strategies would ultimately outshine their current strategy if created properly.