Microsoft Heads to the Mall

It's not a bad dream. It's not a lame joke. It's real.

When Microsoft (Nasdaq: MSFT  ) hired a former Wal-Mart (NYSE: WMT  ) executive in February, and tasked him with creating a line of retail stores, I wasn't the only one who found the move to be stupid.

If you're like me, you figured that the venture would be abandoned after a rudimentary feasibility study. Well, just as some bozos at Wise recently gave the green light to honey barbecue Cheez Doodles -- trust me, they're raunchy -- Microsoft is still bent on rolling out its incomprehensible mall chain.

Instead of orange dusty fingers, Mr. Softy's going to be red-faced after this.

Making matters worse -- or funnier, at this point -- Microsoft is picking the worst possible mall neighbors.

"We're going to have some retail stores opened up that are opened up right next door to Apple stores this fall," COO Kevin Turner told developers yesterday.

Apple (Nasdaq: AAPL  ) ? You can't be serious! Talk about a gamble. I've been to nearly a dozen Apple stores, and they're always buzzing and crowded. Can you imagine if the Microsoft store next door isn't as lively?

If Microsoft can't be cooler than Apple, this is going to be a colossal fiasco. What happens if even diehard Redmond rooters are embarrassed to be seen walking into a barren Microsoft shop?

I'm sure Microsoft has thought this through. Right? It's seen how the "I'm a Mac!" ads have jabbed at the company by placing cool Apple alongside the clunky, chunky Microsoft. The world's largest software company can't be dumb enough to perpetuate this image at the retail level.

The only way this works is if Microsoft pushes its coolest gizmos -- like Surface touchscreen tabletop computers and an Xbox 360 gaming lounge -- to the front of the store. Bury the guts -- like the Microsoft Office 2010 and Windows 7 demos, and especially the dust-collecting Zunes -- toward the back of the store.

Microsoft's store aims to be more of a product showcase than an actual retail hub, but that can't work. If there isn't buzz around the register, or if folks aren't walking out with Microsoft bags to brandish as they walk through the mall, the ambassadorial efforts will be wasted.

Can Mr. Softy show off its upcoming Xbox 360 titles without angering the GameStop (NYSE: GME  ) a few stores down? If it finds itself at a suburban strip mall, can it market webcams and software without angering the Best Buy (NYSE: BBY  ) anchor?

How can this work, when there's such a delicate balance at play? The stores have to be cool, but they also have to be Microsoft.

Is it too late to trash the plan and just go with a chain of Mr. Softy ice cream parlors?

The world according to Microsoft:

Apple, Best Buy, and GameStop are Motley Fool Stock Advisor selections. Best Buy, Microsoft, and Wal-Mart Stores are Motley Fool Inside Value picks. The Fool owns shares of Best Buy. Try any of our Foolish newsletter services free for 30 days.

Longtime Fool contributor Rick Munarriz will still walk into a Microsoft store at least once, no matter what the mall rats think. He owns no shares in any of the stocks in this story and is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.


Read/Post Comments (4) | Recommend This Article (7)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On July 16, 2009, at 2:53 PM, SteveTheInvestor wrote:

    Yeah.... right. Personally, I wouldn't walk across the street to visit a Microsoft store. Talk about a boring shopping trip.

  • Report this Comment On July 16, 2009, at 3:40 PM, dargus wrote:

    Microsoft needs to accept the fact that their brand isn't hip, and will most likely never be hip. There isn't anything wrong with this, although a hip image can help sales. I hope these decisions aren't based too much on Apple envy over sound business plans.

  • Report this Comment On July 16, 2009, at 4:24 PM, militauro wrote:

    Well the Xbox 360, I think, falls under their "hip" category. Although I tend to agree with most of the points Rick made in this article, I don't agree with the display pieces. Best Buy doesn't get upset when Apple sells iPods at it's own store, so why would it care if Microsoft sold webcam software? The GameStop point is better, but even then it won't be enough for GameStop to get all riled up over it.

    I think this is a stupid idea, but you never know what MS has under its sleeve. I'm a big believer in giving it a chance before we say its dead on arrival.

  • Report this Comment On July 20, 2009, at 5:09 PM, bloodyrom wrote:

    Thank you motley fool for once again reminding me that most of what you read (including articles on this website) is written by morons who obviously have not done one Iota of research but are simply spewing there uninformed bias. Mr. Munarriz you have written an article that has no basis in fact. You have no idea what these stores are going to look like and clearly from your article no idea of why Microsoft is doing this. Why did you bother writing the article. All you seem to be saying is "Haha look how clever I am. I can make big bad Microsoft look like a real dummy". This is truly pathetic journalism. Spend some time doing some research for god's sake. I clicked on this article to learn something about why microsoft was doing this. Your drivel told me nothing except that you don't like the idea.

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