Crastinate

Last year I took part in the Microsoft MBA Digital Market Competition. The competition was set up by a few MBA graduates who work at the search division at Microsoft in New York. The competition required the creation of a marketing plan around two of Microsoft’s online products. My team came in second place and it was lots of fun.

The reason I bring this up is because even though this was a Microsoft competition run by a search division (which means they value search heavily in a marketing plan), Microsoft usually made up only 10-15% of the budget allocated towards search marketing in the contestant’s submissions. The large majority of the search marketing budget went to Google even though we were presenting to Microsoft executives. This is understandable. At the time, Microsoft’s search marketing wasn’t considered to be a worthwhile investment of time and resources. Google seemed to just do everything better.

The fact is that public perception plays a large role in how much money Microsoft makes from their search. Companies won’t even bother advertising on Microsoft Search if they think no one is going to click on the ads. It’s just a waste of time and resources that could be put to better use on Google Search ads. This also has a huge effect on what each advertisers pay for keywords on MS Search. Remember that advertisers pay one penny above what the next lowest bid for that keyword is (actually, that’s not entirely true. There is a quality score which comes into play but the cost per keyword plays a large role). So if some advertisers pull out or just don’t bother, the ripple effect is lower rates for keywords for all current MS advertisers.

Bing has solved a lot of these problems. Bing is getting very good reviews and is now seen as a competitor to Google. We all know that Google will continue to dominate the search industry. Microsoft knows that too. But what Bing has done is given Microsoft the public perception that they have a product that is worth using in your search marketing campaign. This means more advertisers, and higher payments for current advertisers. Microsoft may not win the search war, but they don’t have to. They just need it to bring in some solid revenue and I think with Bing, it will.

Google recently announced that they are offering offline access to Gmail via Google Gears. As a big fan of the offline functionality of Google Docs, I am looking forward to using similar functionality with Gmail. This announcement, as usual, has brought out the pundits on how Google is taking one step closer to taking over the Microsoft-dominated desktop. I find most of these articles to be sensationalist journalism.

Here are the reasons why Google is not close to taking over the desktop:

• Regardless of whether you use Google Docs or any other online document creation service, you MUST have a copy of Word, Excel and Powerpoint on your computer to do business.
• Browsers can freeze or just be annoyingly slow. Google uses the browser as their platform to launch these cloud-like services. Bad browser experiences will hinder acceptance of these products.
• Microsoft isn’t too many years away from developing good web/sharing functionality that would be built into MS Office.
• Big businesses seem reluctant to leave the Microsoft standard suite for online services for their core functions.

Everyone likes to talk about Google’s big play for the desktop. I think Google is still fighting for its piece of the internet. They’re not tackling the desktop just yet.

As many of you know, I’m in school full-time getting my MBA at Baruch College (Zicklin) in New York. Last March I entered the Baruch Microsoft Marketing Competition. The goal of the competition was to come up with a marketing plan that would use a $5 million budget to achieve 50,000 downloads of 3 or more Windows Live Suite services (Messenger, Write, Photo Gallery, Mail, etc) and 20,000 registrations of Windows OneCare ($50 a year).

My teammate, Jason, and I carefully weighed our options. We could play it safe and come up with a marketing plan that a typical agency would come up with. This would entail a nice mix of search, display and print advertising to the relevant target markets. Or we could come up with something totally unique and show the judges something they haven’t seen before.  We chose the latter option.

We immediately took aim at the metrics we were being judged on. Downloads don’t tell you much. Anyone can download something. Using the product is what’s important. We focused on product usage, not downloads. Inspired by AMEX points and Marlboro points, we created a program called Microsoft LivePoints. Users accrue points by interacting with the products they downloaded. They also accrue points by referring friends. Users with the most points win weekly, monthly, and yearly prizes. It’s not the best program. But at least it wasn’t typical.

We had all the details written out in our proposal document. Got accepted into the semi-finals where we presented our plan to high-level Microsoft executives. We made it to the finals and presented to some even higher-level Microsoft executives. Eventually we came in 2nd place. The criticism we got on our plan that while the execs loved the focus on use rather than downloads, they felt the plan required some implementation on Microsoft’s end and they have a history of not implementing well (I’m not kidding. That is what they said). We ended up getting a couples of Zunes as prizes. It was good experience and I’m glad I did it.

Last week Microsoft announced a new program called SearchPerks. The program allows users to accrue tickets by using their search engine. Users can submit these tickets for prizes. While somewhat different, this idea sounds eerily similar to the pitch my friend Jason and I gave to Microsoft execs 6 months ago.

Check out my presentation from the competition embedded below. Then check out SearchPerks. Our team was named after the first prize…an XBox, Zune and a dinner with Microsoft executives.

[slideshare id=650149&doc=msftpresentationforblog-1223671148154395-9&w=425]

What do you think? Do you think my pitch had any influence on this new SearchPerks program? I’ll let you decide.

[polldaddy poll="986858"]

I’ve been noticing a lot of battles amongst Web 2.0 giants lately. Let’s just take a look at a few of them:

• Microsoft’s battle to buy Yahoo (now it’s more like Yahoo’s battle to be bought by Microsoft)
• eBay’s battle with Craigslist
• Michael Arrington’s battle with Wired
• and more recently, Google’s battle with Facebook

What I find most interesting about these battles is that, only recently, are we seeing the dark side of business with some Web 2.0 darlings. eBay and Craigslist! They’re such good companies that have helped consumers communicate and get better prices for their goods. Why are they fighting? Well, it’s because eBay bought 25% of Craigslist and then launched a competing service. What about Michael Arrington and Wired? Well, Techcrunch is going to be syndicated at the Wall Street Journal website and Wired is pissed about it.

What is comes down to is that none of these companies (even Craigslist) is about anything other than money. Each company has its own agenda and it all comes down to dollars and cents. Find me one successful web 2.0 company that seems to be altruistic in its ways and I’ll show you how all they’re doing is focusing on the $$$. You have to love capitalism.

The subway door opens and I step in the car with a swarm of other passengers. We all consciously and subconsciously adjust our body position to maximize our personal comfort as well as allow as much room as possible for other passengers. Like a can of sardines, the packed car rides to the next stop where some people get off, some people get on, and the process of reestablishment for personal space starts again.

This subway dance that I perform every morning (along with other NYers) reminds me of the current search market. We’re in between stops riding the packed train. We’ve got a huge fat man named Google who takes up most of the car, somewhat smaller men named Yahoo and Microsoft, and then a few skinny people on the side with the biggest being Ask.com.

We’re coming up to the next stop and something will change. Microsoft might still eat Yahoo (wait a couple months and they might rebid after the stock drops from shareholder lawsuits) and we’re all waiting for that new innovation in search. Whether Yahoo gets eaten, attaches itself to Google (they start dating and can stand closer to each other), or just withers away, there will some reorganization of space in this subway car in the near future. What we need is some new people to come in. We need innovation in this space. We need the next Google to compete with Google. I’m looking forward to the next stop.