microsoft's search
TRANSCRIPT
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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