Saturday, December 27, 2008

MSN Competitive Environment Exploratory

Ethical Concerns about MSN Paid Placement Tactics vice Google
McLaughlin criticized Microsoft MSN for its Paid Placement tactics while giving Google accolades (2002, p 116) for their class and morality. For Microsoft, she only says “others, like MSN, do a poor job.” MSN was charged with two counts: 1.) Mixing real content with paid placement to misinform users of its search engine with annoying search results; and 2.) Rigging search results (p 121-2) by low-ranking competitors, for example travel sites, while high ranking their own, like Expedia. Google gets high marks (p 117) in its handling of paid placement.

Paid Inclusion, different from paid placement, is a shakedown racket. Yahoo for example, charges $299 so its spider does not “miss” a company’s Website. Google firmly opposes Paid Inclusion (McLaughlin, 2002, p 123).

Google Offers Software as a Service and it has a Service Level Agreement
Kirk (2008, p 1) reports that Google is offering a service level guarantee for users of its Google Apps suite. This suite is a direct attack on Microsoft’s revenue stream and it is offered free, supported by advertising revenue. This Service Level Agreement is a move to attract corporate customers and Microsoft must address it with its own Software as a Service through MSN. Google does not have extensive social capital with corporate customers and this is an advantage Microsoft can leverage, at least for now.

Yahoo Struggling
Hardy (2006, p 1) notes that Yahoo is struggling to keep up with MSN and Google. The cost of keeping current with the relentless advance of technology is proving too much. The Associated Press (2008, p 1) goes on to say that Yahoo has deep concerns over its viability now that Google has withdrawn its offer to support Yahoo with advanced technology. Google made that offer during the recent Microsoft-Yahoo merger negotiations.

Content editors: MSN versus Google
Rosoff (p 2) notes that MSN is a destination site that supports edited content. MSN has skilled editors collate collections of information. Other MSN brands also use content editors to manage information collections germane to the brand. On the other hand, Google is merely a platform for visitors who want to set up their own links to information. This information can be aggregated from other web sites or from RSS feeds.

The advantage of content editors is that they can represent a community of interest (COI) and create and provide access to information specific to that COI. The COI then has a place to go for the information they need that has been vetted for relevance and credibility. It reduces the noise in their searches for information and increases the trustworthiness of what they do find.

Analysis of Search Service Offerings at Google, Yahoo and MSN
Google and Yahoo are the search portal market leaders today for an Internet characterized as an Aristocratic network. This is to say that a small number of nodes (like Google and Yahoo) are “super-connected” so that most people visit these sites. However, physicist Mark Buchanan’s report (2002, p 124-7) on mathematical studies of networks that show the phase of “super-connected” hubs (such as Google and Yahoo today) eventually gives way to more egalitarian networks from the simple processes of history and growth. Many nodes connect to Yahoo or Google as a start to searching out information. However, Buchanan’s conclusion on networks is that “Whenever limitations or costs eventually come into play to impede the richest getting still richer, then a small-world network becomes more egalitarian, as seems to be the case with airports and a number of other real-world networks.”

Niche search sites have established themselves as a brand. Today’s two largest super-connected nodes on the Internet, Google and Yahoo get the majority of advertising revenue. However, the trends in marketing may also be working against the continuation of the current aristocratic nature of the Internet.

Marketing is moving away from the mass advertising of the same message to a large audience. According to Duncan (2005, pp 211-212) the value of the Internet is the ability to send custom messages to highly targeted customer segments. The reach of a specific message to a small but coherent group is higher than a general and therefore mostly irrelevant message to a large group. As the ability to identify and verify audience characteristics for smaller, specialty sites improves, advertising revenue may shift from Google and Yahoo to this new direction.

The message to Google and Yahoo is that super-connected nodes don’t last. Just as the few air network super hubs gave way to geographically dispersed regional hubs, so will the Internet. In short, Google and Yahoo are vulnerable as Amazon is already exploiting. MSN, like Amazon, has the opportunity to move profitably into the future of software services, if it acts appropriately.

Finally, Yahoo is already fading fast. They foolishly rejected Microsoft’s overly generous offer earlier this year, and now on their own again they seem to have lost control. Their stock price has fallen from $30 per share six months ago to $8 per share today (see Yahoo, 2008b, p 1). Significant employees have left the company.

Mail comparison: Google the best
Agarwal (2007, p 1) compares MSN Mail, Yahoo Mail and Google Mail according to five characteristics: 1.) User Interface; 2.) Spam Controls; 3.) Storage Space; 4.) Speed; and 5.) Advertisements. His findings are that Google Gmail is the winner in four categories: 1.) Spam Controls; 2.) Storage Space; 4.) Speed; and 4.) Advertisements. Yahoo!Mail has the best User Interface. He also notes that the Windows LIVE Mail or MSN Hotmail has bugs in it, has poor performance and makes egregious use of advertising.

Site visitors prefer Google and Yahoo while advertisers prefer MSN
The Experian/Hitwise survey (see Tancer, 2008, p 1) clearly shows that site visitors prefer Yahoo and Google ahead of MSN for the search and portal services being offered. Advertisers, to the contrary, prefer MSN. Blank (2006, p 1) cites numerous media firms and marketing research companies that express a decided preference for Microsoft. However, as Agarwal (2006, p 1) notes, advertisers pay more for Google and Yahoo because of the higher traffic count.

Agarwal, Amit (May 03, 2006). Bloomberg spoils the MSN Advertising party in Redmond. Retrieved on December 2, 2008 from

Agarwal, Amit (February 05, 2007). Yahoo! Mail vs GMail vs Windows Live Mail. Retrieved on December 3, 2008 from

Associated Press (November 5, 2008). Google drops Yahoo advertising partnership. Retrieved on December 2, 2008 from

Blank, Christine (June 8, 2006). MSN Advertisers Report High ROI, Less Traffic. Retrieved on December 2, 2008 from

Buchanan, Mark (2002). Nexus: Small Worlds and the Groundbreaking Theory of Networks. Norton.

Duncan, T (2005). Principles of Advertising & IMC. McGraw-Hill/Irwin.

Hardy, David (May 18, 2006). Yahoo! advertising set to take on MSN and Google AdWords. Retrieved on December 2, 2008 from

Kirk, Jeremy (10/31/2008). Google introduces service-level guarantee for its Apps suite. Retrieved on December 2, 2008 from

McLaughlin, Laurianne (2002). The Straight Story on Search Engines. PC World. Retrieved on November 19, 2008 from

Rosoff, M (October 23, 2006). The Future of MSN. Directions on Microsoft. Retrieved on November 22, 2008 from

Tancer, Bill (August 3, 2006). Google, Yahoo! and MSN: Brand Association. Hitwise Intelligence. Retrieved on November 22, 2008 from

Yahoo (2008). What is the combined market share of the Google, Yahoo! and MSN? Retrieved on November 15, 2008 from

Yahoo (2008b). Yahoo Six Month Staock Chart. Retrieved on November 23, 2008 from

No comments: