Why Microsoft Fails to Win Online

windows-games-chessMicrosoft’s battle to conquer the web has a certain Moby-Dick-like quality. Me-too products, muddled branding strategy and constantly playing catchup with competitors has reduced the king of software to a punch line. The more they try, the further they get. In the third quarter of 2008, Microsoft’s (s msft) online revenues were $770 million, up 15 percent from Q3 2007. But the losses jumped 80 percent year-over-year to $480 million. Adam Lashinsky succinctly sums it up:

Microsoft is so busy playing defense against Google. Yet Microsoft hasn’t done a great job with that either. Even as it has spent money on data centers and marketing gimmicks like giving cash back to users of its search engine — the online equivalent of banks handing out toasters for opening accounts — Microsoft continues to lose share to Google.
Microsoft’s portion of U.S. search queries was 8.5% in September, according to comScore, down from 10.4% in January 2007. During the same period, Google’s share rose from 53% to 63%. And Facebook, MySpace, Google’s YouTube, and other, newer sites have reduced MSN to also-ran status in terms of web popularity.
That at least five high-ranking Microsoft executives have a piece of the online portfolio illustrates another part of the company’s predicament. Microsoft doesn’t speak with one voice when it talks about the Internet. (via Fortune)

Perhaps that explains why it was willing to make a deal with that bureaucratic quagmire called Yahoo (s YHOO). Regardless, do you have any advice for Microsoft as it tries to win on the web?
Photo courtesy of Microsoft Corp.