You have to give Steve Ballmer and Microsoft credit. After years of sitting on the sidelines playing defense and catch-up, this year they have definitely been on offense. Whether it's the ad wars, releasing Bing, the deal with Yahoo!, the retail strategy or its latest move, a deal with Nokia , the company known for being stodgy and slow seems to have finally awaken from its decade long slumber and is attempting to define the terms of the game. To that end, Ive decided to grade Microsoft on each of these moves.
Ad Wars - Grade: D
While the company is trying very hard to redefine itself to a new generation of buyers, the ads have mostly fallen flat. As I've written here before, the 'I'm a PC' and 'Laptop Hunters' fail to take into consideration that they sell an OS and not hardware. The Laptop Hunters got some traction, taking advantage of the weak economy and high price of Macs, but recent sales figures have shown that Macs are selling just fine (as I wrote in Lauren's Wrong: People Definitely Want Macs).
Bing - Grade: B- (but work still outstanding)
While I haven't been personally impressed with Bing when I've used it, it has captured the attention of the media. I like the interface (even if it's not totally original), but I've gotten mixed results when using it as my search tool. To be fair, some people love the Home page picture and the visual nature of Bing, and it has done very well out of the gate, but it has yet to prove that it has made any substantial improvement in market share. If my blog stats are any benchmark, I can tell you I get very few hits from Bing on sites where I can track search engine sources.
Yahoo! Deal - Grade: A
On the face of it, this was a great move by Microsoft. They didn't have to spend their cash reserves to buy the company, but they got many of the same advantages as though they did. As I wrote recently in Microsoft and Yahoo! Take a Big Gamble on Bing, Microsoft did well getting a 10 year agreement for Yahoo! to run Bing giving the company two major outlets for Bing technology for a very long time. While it remains to be seen if Bing will pan out, Microsoft gets Bing in front of Yahoo's 20 percent search engine market share and that catapults them from their current 8 percent ranking.
Retail Strategy Grade: F for idea, Incomplete for implementation
Sorry, but I just don't see how Microsoft can succeed with a chain of Microsoft stores. Unlike Apple, they don't sell very much hardware (except the Zune and XBox 360). What's more, they will be undercutting their channel partners such as Best Buy which sells out of the same retail locations where Microsoft hopes to operate. At best, they dilute the market for these partners. At worst, they lose tons of money in high rent locations. This whole approach makes little sense to me.
Nokia Deal - Grade: C
Just the other day, Microsoft announced a deal with cellphone handset maker Nokia to develop business software including Microsoft Office to run on Nokia's Symbian OS. While this seems like a solid approach, this Mac World article points out that both companies are losing market share this year so in a sense it feels like a desperation move by two fading giants hoping to stop the bleeding. But it could also provide a more competitive marketplace for business smart phones.
So there you have it. It's not an outstanding report card, but it shows that Microsoft is trying hard to regain control of the conversation.
What do you think of my grading? Was I too hard? Too Easy? Leave a comment and let me know.