Microsoft's Search

8/10/2019 Microsoft's Search

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Microsofts Search

2014. 5. 23

Sungwoo Park, Hyunjong Yu, Junhyuk Hur


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Which Search Do You Use?


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Microsofts Business Segments


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Microsofts Efforts to catch up with Google


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(1) Learning Curve

New Entrant

Early Mover


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(2) Network Externalities

Dynamic analysis reveals that if this market continues on its natural

trajectory, Microsofts position is likely to deteriorate even further.

Winner-take-all tendency of market


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(2) Network Externalities

Users and advertisers are willing to be part of the biggest

network, to increase the value they derive from the platform.


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(4) Switching Cost

Because of Switching Costusers locked-in

Google Search


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(5) Google has ability to deal with

Managing large farms of thousands of servers,

Designing customized OS for them and

Ranking an increasing number of documents.


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The Reason to cling to Search


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Why is Microsoft pursuing the market for

search and search-related advertising?

The first is an offensive rationale: Search is anattractive business for Microsoft.

Google threat Microsofts business field :

Microsoft must be in search in order to protectother businesses.


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Whyis Microsoft pursuing the market for

search and search-related advertising?

Attractive market search and serach advertising

and its still in its early day

Global($bn) 2007 2009 2012

Searchmarketing 20 - 40

Total onlineadvertising

45 67 98

Percent oftotal

advertiding8% 11% 13%


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Lets look back on MSs success


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Microsofts Strategy - Appl icat ion Softw are

1. They targeted on Apple first, so Word and Excel soon became

leading application on the apple Standard, where WordPerfectand Lotus made less effort. Microsoft used its Apple-based

development of Word and Excel to learn about graphical user

interfaces and to enhance the GUI of its Windows operating

system.

2. Arround 1990, Microsoft began to bundleWord, Excel, and

Powerpoint into a popular suite, Microsoft Office and began to

offer "competitive upgrades" - discountsfor customers who were

switching from WordPerfect and Lotus 1-2-3.

3. The popular Windows operating system standardized andsimplified the user interfaces of applications and made it easier

for users to switch between applications.


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Microsofts Strategy - Internet B row sers

1. IE and its matching server product were offered forfree.

2. IE came bundledwith Windows on new PCs.

3. Versions of IE were soon available not only for

Windows, but also for the Apple and UNIXoperating systems.

4. Microsoft also struck deals with Internet service

providers(ISPs), who agreed to install IE as they

provided Internet access to consumers.


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Microsofts Strategy - Summary

Microsoft is a dominant player in the market.

They achieve large number of users and create

a network effect that makes them successful.


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Satya Nadella(CEO of MS)

What integrated strategic option should

Microsofts executives pursue?


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What integrated strategic option should

Microsofts executives pursue?

A real breakth rough

A d isrupt ive innovation

A game changer


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1. One-Stop Platform


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2. Strategic Alliance with Yahoo

Passive way : Offer search engine to Yahoo

Active way : Pushing ahead M&A of Yahoo again


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Spear and Shield

3. Full-scale War against Google

Battle Field

Microsoft's Search

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