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10.09.10

Massive Implosion at Microsoft: Another Business Unit Dies

Posted in Microsoft at 6:46 pm by Dr. Roy Schestowitz

Sunken ship

Summary: Massive, which Microsoft spent a lot of money buying, is finally being buried

THE list of Microsoft’s deprecated services, dead products, and discarded divisions grows at a fast rate and it is not deniable that Microsoft suffers a lot right now. Maybe its investors didn’t quite get the memo because Microsoft spends a lot of money making promises and showing/alluding to vapourware. The truth is, the core of the company is stagnating and Microsoft just cannot find good ways to evolve.

The next wave of destruction within Microsoft is Massive, which previously suffered layoffs.

Microsoft Nick has covered this:

Despite saying in May that the effectiveness of in-game advertisements blew away expectations, Microsoft reportedly is shuttering its Massive video-game advertising unit four years after acquiring it.

Here’s more:

An online report suggests Microsoft’s in-game advertising unit, Massive, will be shut down before the end of the month.

Ad industry trade publication Adweek cites “sources close to the company” and “insiders at Microsoft” in reporting that Massive General Manager J.J. Richards has been seeking new employment with other unit members reportedly being reassigned throughout the company.

The report suggests that Microsoft had been shopping around a Massive buyout in the past few months, reportedly seeking a high six-figure or low seven-figure sale to rival ad network Double Fusion.

At this rather alarming shrinking rate, all that may remain of Microsoft is Windows and Office, which are sold only because of inertia and somewhat unlawful exclusion (bundling, formats, and so on).

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8 Comments

  1. The Mad Hatter said,

    October 9, 2010 at 9:12 pm

    Gravatar

    I estimated that Microsoft would be in Chapter 11 within five years, about a year ago. I’m beginning to wonder if maybe it may occur faster.

  2. TemporalBeing said,

    October 11, 2010 at 1:15 pm

    Gravatar

    There are several key points in the life of a company all of which determine how long a company will last.

    1) The Founding – will the company survive the first 7 years.
    2) Growth – will the company recognize it needs to grow and do so in a balanaced way.

    The above are the most well known. Most start-ups do not make it past #1. Those that do struggle with #2 – either they try not to grow at all, or they try to grow too fast. If no growth (e.g. employees, etc.) then they will lose their customers as they won’t be able to meet demand. If too much growth then they overstretch themselves and lose customers because they are stretched too thin.

    If a company survives those two things then there is still a major challenge to overcome – the departure of the founders, which could happen any time even during those initial stages, though it usually ends up being a disaster for the company at those points. This is what Microsoft is struggling with. Since its founding Microsoft has had BillyG and co at the helm. Now everyone is retiring or moving on and the next generation must take over; yet Ballmer is still around trying to keep BillyG’s mentality – the old way – working. If Ballmer were cast aside, Microsoft might survive, though not likely – but it would have a better chance.

    However, Microsoft’s next biggest problem is that its too dependent on its two cash cows – Windows and Office – and the rest of the company requires the extra cash from those two in order to even have a semblance of profit. And the Window+Office franchises are in trouble with WinPhone7 losing out to Android and iOS in the embedded space (since Microsoft can’t envision anything other than their Windows Desktop), Windows Server losing to Linux, and Windows Desktop and Office facing battles due to ODF, security pressures, and people realizing there is a world other than the mediocre Microsoft out there.

    5 years may be a bit extreme, but either Microsoft will be a very small shadow of what it is today or it will be completely extinct between 10-20 years, though I guess I should say 8-18 years since I’ve been saying that for about 2-3 years now.

    There’s a reason Microsoft fought so vehemently to keep OOXML as the standard – without it no one needs Windows, or Microsoft.

  3. The Mad Hatter said,

    October 11, 2010 at 4:03 pm

    Gravatar

    TemporalBeing,

    You aren’t considering the network effect. When you consider it, four years is about right. But there are certain signs that it may happen quicker.

    Dr. Roy Schestowitz Reply:

    Speaking from what I see when I read the news, what’s important is that Microsoft is heading down. From Mini-Microsoft:

    Wow, what got in the corporate water for this week? Coming off the glow of last week’s Company Meeting Koolaid we first got hit by the Goldman Sachs downgrade hang-over, then, to channel Mr. Ballmer, “Boom-Boom-Boom!”

    * Health care changes on the way.
    * Live Labs gets shut down.
    * Technical Fellow Gary Flake, one of Microsoft few-TED stars, resigns.
    * Technical Fellow Brad Lovering leaves.
    * A glassdor.com survey that shows a lowly 50% approval rating for Mr. Ballmer.
    * IEB gets re-orged.
    * Massive gets shuttered (like we were all looking forward to billboard ads while blowing crap up in Xbox).
    * Adobe acquisition rumors.
    * Matt Rosoff leaves Directions on Microsoft.

    All this right on the eve of Windows Phone 7 being launched. Feels like one big… purge.

    I may take a bit of a break from blogging about Microsoft.

    The Mad Hatter Reply:

    That’s why I think that it may be three years rather than four. the company is still profitable, but it’s tearing itself apart internally, and totally unable to compete except in two narrow markets.

    Disaster – film at 11:00!

    TemporalBeing Reply:

    You also forget the inertia. It will take a bit more than 3 or 4 years for the full inertia to die off and for Microsoft to succumb to it. Think about how many places M$ has their fingers in, how many companies are essentially backing them, and how widespread their software is used. That won’t disappear over 3 or 4 years as people still have to find alternatives for big products – like SAP for example – things that run on Windows and have no alternative but are core business software. People will keep their subscriptions around until they get a replacement; but their licenses will dwindle as they cut back to having Microsoft products only where necessary, etc.

    There’s a lot riding on Microsoft, and it’ll take time to unwind.

    Now, I’d be glad to be wrong and see Microsoft drop a lot faster. But from a business point-of-view (as well as an IT rollout point-of-view) I just don’t see it happening.

    For example, even if a major corporation such as Hewlett Packard, IBM, Northrop Grumman, etc decided to make the switch away from Windows today – it would take them 3 or 4 years to complete the switch. Even if everything was in place – meaning all desktop and laptop systems could be switched over without side-effects – it would still take them at least 1 years just to migrate end-users, not to mention any retraining. Now add another 1 or 2 years per major application (e.g. SharePoint, LiveLink, NetMeeting, etc.) and the roll-out goes longer.

    There’s just some simple practicalities that will keep Microsoft around – even if it’s only a shadow of what it is now – for a lot longer than 3 or 4 years.

    The Mad Hatter Reply:

    You are mistaking the need of the customer, with the health of the company. It’s quite possible for Microsoft to die, before their customers have an exit strategy in place. The customers won’t like it, but really considering how badly Microsoft supports them right now, they probably wouldn’t be any better off.

    Oh, and you are also assuming that these large companies are stupid enough that they can’t see what’s coming, and make plans. They aren’t that stupid, and I suspect the changeover will happen so fast that the tech press will go into shock.

    Dr. Roy Schestowitz Reply:

    They could aways spin off Windows and/or Office as separate companies.

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