Microsoft (Nasdaq: MSFT ) is in trouble.
Threats are everywhere. Apple (Nasdaq: AAPL ) leads in digital entertainment and is emerging in mobile. Google (Nasdaq: GOOG ) is killing you and everyone else in search. And your top technologist, Ray Ozzie, pegs Amazon.com (Nasdaq: AMZN ) , not you, as king of cloud computing.
But Google is the elephant in your Redmond, Wash. boardroom. You know it, too. You said as much in a summer memo to employees:
We continue to compete with Google on two fronts -- in the enterprise, where we lead; and in search, where we trail. In search, our technology has come a long way in a very short time and it's an area where we'll continue to invest to be a market leader. Why? Because search is the key to unlocking the enormous market opportunities in advertising, and it is an area that is ripe for innovation. [Emphasis added.]
Trouble is, your investments have yet to pay off. You're not doing anything different. Consider your much-hyped search deal with Facebook, which went live in October. It's like, well, pretty much every other search engine I've used that isn't Google.
Opportunity, lost. Or as Mashable's Adam Ostrow put it in his review of the engine, "Facebook (and to an extent, MySpace through its deal with Google) has an opportunity to do something cool with social search, but so far this looks like a typical search engine-content partner deal." It still does, Steve.
Which isn't to suggest that your team at Microsoft is sitting idle. I know better; I've seen the reports. You're in a data-center arms race with DoubleGoo, and your weapon of choice is a crate of servers and storage that some are calling "cloud containers." Dell (Nasdaq: DELL ) is among the various component suppliers whose gear you're using to transform the newly minted Windows Azure into a cloud infrastructure rivaling Amazon's largely unsung Web Services platform.
Could you be a little more social, please?
But a darker, denser cloud won't help you kill Google. For that, you'll going to need to be better at search -- a lot better. You're going to have beat Google on its turf.
Forget trying to do that conventionally. Build a better index? Cuil tried and failed. So did Yahoo! (Nasdaq: YHOO ) and IAC's (Nasdaq: IACI ) Ask.com. Build a better interface? Kosmix.com is among the many trying that, but Google still controls a majority of search market share. In the face of several persistent rivals, its dominance continues to grow. There's no out-Googling the Google.
Drastic measures are all that's left. You have to do something Google hasn't tried but everyone wants. You've got to master social search, and then embed it with every platform you own.
What's social search? Google vice president Marissa Mayer gave her thoughts in an August interview with VentureWire:
So if we took Web History and allowed that data to influence rankings, such that pages that your friends have visited were now bumped up in your search ranking, that that might be a good augmentation to something like personalized search. In essence, it's a fusion of personalized and social search. In this case, what we would do is say: This Gmail account which maps to Marissa Mayer then maps to these other friends, allow those friends to influence this ranking ... But no, we have not done anything like that to date.
Key words there: to date. Google will implement this feature or something like it, because when it comes to search, it's important to understand the sources to which we ascribe value. Friends are more valuable to us than strangers.
But strangers also have value. Social networks have seen to that by providing a mechanism for indexing groupthink. Twitter aggregates these digital conversations better than any other platform on the Web.
Facebook knows this. So does your neighbor, Jeff Bezos. So does Google. And so should you. Because someday soon, Google is going to make a bid for Twitter, and you probably won't be given a chance to counter that offer. Want to beat Google? Go get Twitter. Now.
Tim Beyers, analyst, Motley Fool Rule Breakers