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Micro-Hoo!™: Desktop vs Internet

Alternative title:  Who Do You Trust?, Part II

Last month, we looked at the question: Who Do You Trust?. That discussion considered how the issue of trust impacts various corporate tech firms.

In light of yesterday's *Micro-Hoo!™ announcement, I thought it might be interesting to revisit the issue. In our Trust discussion, we looked at a few firms -- Apple, Microsoft, AOL, Google, Dell, and Yahoo. At the time, I observed:

"Consider: Apple (AAPL) can get away with a snafu like the iPhone pricing issue, because it has earned the trust, even the adoration, of its users. Could you imagine having that trust with Microsoft (MSFT)?

Dell used to have that trust, but frittered it away, as they moved from one of the best to much worse customer service in the PC space. AOL also -- they've decayed, become a garbage service for the clueless. (AIM remains mostly worthwhile).

Google (GOOG) has earned my confidence, and -- so far -- has not given me any reason to reconsider that trust.

Yahoo (YHOO) still has some residual trust -- but its waning fast. I still use Yahoo as a home page, but their inattentiveness to some of their properties is shameful. They have a very, very brief period to right the ship, or their long horrific slide into irrelevancy will be irreversible. Yahoo has frittered away so many good properties, I find it embarrassing. (WhoTF is advising them?)"

Now, Trust sounds like "a warm fuzzy" -- a non-quantifiable thing that no one in business school will spend much time on. But when it comes to your personal data and the internet, Trust is a key component. Further, Trust may be the one variable that may determine how successful this merger is in the years to come. (See Paul's look at online market share).

Amongst all the cheerleading on the announcement (CNBC was something to behold Friday morning), I have yet to see this issue discussed. Hopefully, we can remedy that here.

Our question of the moment: Why has Microsoft never really caught fire online the way they did on the desktop? I don't want to get into another run-of-the-mill Microsoft bashing; rather, this is a genuine attempt to understand and explain their failure in the online arena.

The obvious answer was they had(have) a desktop monopoly, and no one controls 95% of anything online. But given their massive cash hoard, their deep programming ability, and a couple smart guys at the top of the company, why have all of the Microsoft online properties been duds? The list is rather surprising:

Hotmail
MSN
Internet Explorer
.Net
Live Spaces
Local Live (Maps)
Messenger
Live Search

Is there a single online property created by Redmond that lit it up? Not one dominates their space. Everyone of these offerings is second or 3rd tier also-ran that imitates another innovator. Hotmail is the closest thing to a success (and most people use that as their garbage account).

I have a theory as to this phenomena, and Steve "my-kids-cant-have-an-iPod" Ballmer ain't gonna like it.

The Microsoft user experience has never been particularly pleasant. I don't mean relative to Macs or Google or what have you, I mean objectively, its always been a mediocre, buggy, difficult, crash-prone, virus-laden, oh-well-call-it annoying experience. Counter-intuitive doesn't begin to cover it.

This god-awful user experience is no secret; I'm not breaking any news here. In fact, it is so well known that you probably have overlooked it as an issue. But websurfers obviously haven't. Over the years, anyone with with a PC has had ingrained onto their psyches EXACTLY what the Microsoft user experience was.

Once Apple's products became price competitive, they exploded in sales;  Why was that? (iPod Halo? Puh-leeze!). Outside of Windows/Office, MSFT's biggest success is the X-Box. From the gamers perspective, there is absolutely no PC/Windows involvement whatsoever.

This is no coincidence.

Ask yourself this question: When you first heard that Ford was using Microsoft's Sync for their car audio/navigation/communication, what was your reaction? Gotta get me a Mustang! or Man, are they toast. Which was it?

Even if Windows were to suddenly become pleasant, it would take a very long time to overcome that prior set of experiences. Although I am not a fan of General Motors products, speaking objectively, I can say their cars have become much improved -- more reliable, better designed, improved build quality. They are just about on par with Nissan and Subaru, and pretty close to Honda and Toyota. Yet its going to take GM many years to overcome the perception of their brand as being nowhere near Honda or Toyota.

Microsoft has a similar branding issue, and I think its part of the reason why their online offerings have fared so poorly. In the corporate computing environment, you had no choice -- you worked on the machine the IT department gave you. 

But online?  "CLICK!"  Buh-bye!

Stop for a moment to consider how brilliant Google's motto -- Don't Be Evil -- turned out to be. Its not just that our competitor's products are inferior, they are on the wrong side in the eternal struggle between good and evil. Now that's some good product positioning!

~~~

Back to our issue of Trust: I know of no one that unreservedly trusts Microsoft. Plenty of people still trust Yahoo!. Google, like Apple, is widely trusted.

I wonder how many current Yahoo! users will find alternatives to Micro-Hoo!™ once this merger closes. The deal risk here is a mouse. its not the usual integration/cost savings accounting stuff, or the clash of corporate culture bullshit we'll be hearing so much about over the next few weeks.

No, the real risk here is "CLICK!".

We've seen the expensive opening gambit from Microsoft. It will be quite interesting to see how Google responds to it. Google apps is a not so subtle stab at one of Microsoft's cash cows. Look for a similar attempt to wrest more revenue, and even more portal traffic away from Yahoo!.

"CLICK!".

~~~

>

* Micro-Hoo!™ is a registered trademark of Infectious Greed.

Saturday, February 02, 2008 | 07:09 AM | Permalink | Comments (78) | TrackBack (0)
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Comments

I think you nailed it. Microsoft has really hurt themselves online because they always tried to use it as yet another club towards vendor lockin. There is a HUGE fight going on between the social networks and Microsoft as various social network sites try to link in your contacts from IM. Google and Yahoo and co let them be imported and used. Microsoft wants to be paid for every contact imported from MSN - like they own it (interesting question in itself) But if the social network agrees to make MSN Msgr the top billed chat client and exclude or diminish the others, the per contact fee is waived 100%.

That kind of stuff goes on all the time. Not saying all the other companies are perfect - but it continues to shine a spotlight on 'Do No Evil' I tend to think of myself as not a naive person and fairly skeptical. Any new MS product would be researched before I installed it for worries over stupid or evil policies that might be involved. Google? They have earned a significant amount of trust - I'd install Google Desktop without concern, knowing a small amount of privacy might be given up. But a MS equivalent - oh hell no. Yahoo was always in between and I think because they didn't have as large a reserve of trust among users, they will suffer from this. MS will be left with those who don't know enough or care enough which isn't the customers people are trying to advertise to. The MS fanboys are already in Redmond's hands.

This merger only helps Google long term.

You nailed it with this idea of users and trust. Its a powerful thing, even among IT types like myself.

Posted by: Mike B | Feb 2, 2008 7:31:08 AM