stronglist.com

1. Improve your search results. Heres a quote from Satya Nadella, corporate vice president of Microsoft’s search and advertising platform group. “The crux of our problem is how do we get existing searchers to use it [Microsoft search] more”. Is Microsoft that out of touch?

Its search division should be concentrating on providing more relevant search results period.

The live.com search results… suck; I rarely find what I’m looking for.

If the search results improved then people would naturally gravitate toward Microsoft live search.

For the user there is no cost involved from switching from Google search to another search engine. If Microsoft provided a better search engine then people would use it over Google.

This should be the number 1 priority of Microsoft’s online division: Improve their search engine so that it provides more relevant results. These results must be equal or better then Google’s.

Microsoft can get away with having equal results because their search bar is more ubiquitous than Google’s.

2. Grab Google by the jugular. Google is Microsoft’s biggest rival in the online space.

Google derives a very large chunk of its revenue from advertising.

In the second quarter Google earned about 3.8 billion in revenue, of that only 30 million didn’t come from advertising.

So Google’s revenues are vulnerable since they aren’t diversified.

Google’s revenues come from ‘adwords’ [displaying ads on Google’s network of sites] and adsense [put ads on other content providers sites and sharing the revenue].

Microsoft needs to attack adsense. Consider adsense a loss leader and give 100% of the cost per click revenue to the content provider. Google gives around 60-80% of the cost per click to the content provider.

Ok, but content providers still wont switch to Microsoft version of adsense because 100% of the Microsoft’s cost per click will in almost all cases be smaller than 60-80% of Google’s cost per click. Microsoft doesn’t have the inventory of ads to generate higher CPC rates.

So before they take on adsense they really need to increase their inventory of ads and take on Google adwords. And how can they realistically compete against adwords? Well they cant unless Microsoft improves their search results.

See #1 above. Its crucial that Microsoft improve its search. If their search improves to googlesque standards then other aspects of their online business will fall into place, as opposed to their current situation of looking busy without making real progress.