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05.03.09

Microsoft’s Online Business is Crumbling Even Further

Posted in Finance, GNU/Linux, Google, Microsoft at 5:37 am by Dr. Roy Schestowitz

Broken heart
Microsoft wants you to take its browser
cookie (and give Microsoft a lot more control)

Summary: Microsoft drops “Search & Give” (for now), cuts down other spurious spendings, and prays it can use Yahoo! to injure Google

MICROSOFT’S ATTEMPTS TO offer incentives to people who use its search engine [1, 2] were never successful, unless it was Microsoft who commissioned contradictory 'studies'.

With its online business declining at a two-digit rate despite huge investments, Microsoft is getting even more cash-strapped, so it sheds off “Search & Give”.

Microsoft is temporarily ending its Search And Give program, a site that sought to boost usage of its Live Search engine by donating a penny per search to an organization of the user’s choice.

Well, according to the same source, Microsoft also cuts spendings on its own employees, not just customers.

The moves reflect the difficult economy and decreased demand for the company’s products. The company last week reported its first year-over-year decline in quarterly revenue – a 6 percent drop compared to the same period a year ago.

The following trollish ZDNet post says that “Microsoft is bleeding.” It’s primarily about Microsoft’s online business.

Each month, new statistics about search engine traffic usage are published by companies like Comscore, and it never fails that Microsoft loses ground, and Google gains. It’s true that search is a small part of Microsoft’s strategy, but when you look at the amount of money they are throwing away to try and compete ($1 Billion per year), it’s not hard to see that there are several eggs in that basket.

Google might lose its partnership with AOL, but Microsoft may never establish an anti-Google partnership with Yahoo!, either. Here is a new list of four arguments against such a partnership:

[T]his week, a source we can only describe as someone very familiar with Yahoo’s advertising business gave us four reasons why Yahoo should actually run as far as can from Microsoft’s offer.

* The primary reason is that while most agencies and ad buyers may not care if they buy their search and display advertising from the same place, some do and the number is rapidly growing. Our source estimates that two years ago, probably 30% of Yahoo’s advertisers bought into this convergence, 50% buy it now and next year, 70% will prefer taking their business to a search engine that can also sell display advertising and vice-versa.
* Even outside of losing the business of advertisers who prefer to do one-stop shopping, giving up search could drastically damage Yahoo’s display business. Our source says about 25% of Yahoo’s display revenues come through behavioral targeting, which doesn’t work if Yahoo doesn’t know what search queries its users are using.

[...]

There are still some reports out there about Yahoo! and Microsoft, but it seems to be eternally hanging. We’ve heard all about it (in one form or another) for over a year.

Yahoo and Microsoft are in talks again, but this time it‘s a partnership deal on the table rather than a proposed acquisition, according to reports.

Yahoo! can’t save Microsoft. Sticking two inferior search engines together won’t make a better one. The same goes for two computer programs like ZFS and btrfs (advanced filesystem implementations, both of which are owned by Oracle).

“Forty percent of servers run Windows, 60 percent run Linux…”

Steve Ballmer (September 2008)

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