Microsoft's Branding is Strategic Suicide

Last Updated Jun 8, 2009 9:00 AM EDT

Microsoft faces an existential threat. Internet-based applications are poised to clobber the Microsoft's PC-based market dominance. Microsoft's only hope for long term survival is to neutralize Google's growing dominance on the Web. Microsoft's plan: to use massive brand marketing to displace the Google search engine. It's a dumb idea and it's not going to work. And it's ironic, too, because if Microsoft stopped screwing around, it could still kick Google's butt...

Let's start with some background. Microsoft is facing a major strategic problem. As BNET's Technology blog ably pointed out in "PC Vendors Must Adapt or Die", web-based applications are becoming a real threat to PC-based applications because they're cheaper, better, faster, and more secure.

Web-based apps can run on a stripped down, lightning-fast operating system. They require no end-user support. They automatically upgrade. They don't get viruses. They're available on whatever machine you're using. They automatically backup your data. As long as you've got broadband (and it's almost ubiquitous already) web-based apps are superior to their PC counterparts.

By contrast, PC applications are inherently insecure, and, due to Microsoft's negligence, allow for the easy implanting of viruses, worm and trojans. Installing, supporting and upgrading them them are a major burden to the end user. And even when you do it correctly, they eventually turn your PC into sluggish collection of bloatware.

Web-apps are clearly the way of the future. Many major application areas, like CRM, are rapidly migrating onto the web and away from dedicated machines. It's a process that will inevitably suck up the growth and eventually the market share, of Microsoft traditional PC-based apps. Ultimately, it could signal the end of Windows as the dominate platform for computing, which cuts at the very heart of Microsoft's business model.

Google is the spearhead of the web-based application movement. From a strategic viewpoint, nothing is more important, for Microsoft, than scuttling Google. Ideally, Microsoft needs to blunt Google's inexorable advance long enough to get its own Web-based application act together. Because it's inevitable that, eventually, people will conduct the majority of their work and play using online apps rather than bulky, balky, overpriced PC-based ones.

So that's the situation. Microsoft faces a HUGE threat. You'd think that Microsoft would be taking bold moves to blunt Google's inexorable advance. But you'd think wrong.

Here's Microsoft's big plan to deal with Google:

"Bing" is another search engine, albeit with a couple of features that Google will imitate (and probably improve) 30 days after Bing goes live.

Microsoft plans to spend $100 million to push the "Bing" brand as an alternative to Google.

This is so incredibly stupid that I'm almost at a lost for words. But here goes.

First, Microsoft is famously dreadful at brand marketing (check out this video), with an alphabet soup of branding flops from "Bob" and "Zune". Microsoft couldn't brand market its way out of a torn paper bag, much less out of an existential threat.

Second, "Bing" is a bonehead choice, even if you drink the brand marketing cool-aid. "Bing" is supposed to be the sound of a bell when you get the right answer, like in a TV game show. Except that it isn't. Have you ever heard anyone say "Bing" in response to a correct answer? Me neither.

Third, "Bing" already has other meanings. When most business people hear the word "Bing," they think of the bestselling author (and BNET blogger) Stanley Bing. In the non-business world, "Bing" refers to a variety of cherries or the star of the movie "White Christmas."

Finally, and most importantly, even if the "Bing" name were a stroke of marketing brilliance, there's not a snowball's chance in a supernova that brand marketing is going to convince people to move from Google to another search engine.

As I've repeatedly pointed out in this blog, in the 21st century, brand marketing no longer works. People today are so inundated with brand SPAM that they just tune brand messages out. (See "The 5 Inviolable Rules of Brand Marketing.")

The ONLY way that Microsoft could POSSIBLY displace Google would be to offer a product so clearly superior to Google that people would migrate to it on their own. And then a morsel of awareness advertising would be more than sufficient to spur the word-of-mouth.

How to make a search product that's clearly superior? Easy. The reason that people migrated to Google from Yahoo in the first place is that Yahoo is a pig's breakfast of visual SPAM.

Today's Google, while nowhere near as ugly as Yahoo, is still full of irritating paid advertisements, which almost always direct you to someplace useless. On Google, you can search for a certain company and the paid links will direct you to one of its competitors. That's annoying, counter-intuitive, and a violation of the "law of least astonishment" -- the bedrock of good human interface design.

If Microsoft really wants people to migrate to "Bing" they should offer it as a free service with NO advertising. None. Since Google's advertising degrades the quality of searches, "Bing" would immediately be superior, because searches would be more accurate.

More importantly, that is the ONE FEATURE that Google can't imitate because the bulk of its revenue comes from that feature. Having your primary revenue tied to the one feature that people don't like is market vulnerability in spades, and Microsoft is idiotic not to take advantage of it.

However, Microsoft probably won't make that obvious move, because dropping advertising from Bing would mean sacrificing short-term revenue for a higher strategic purpose.

Fifteen years ago, though, that's exactly what Microsoft would have done. Remember when everyone thought they were nuts for offering Internet Explorer for free, when users were paying good money for Netscape? Well, everyone was wrong, as evidenced by Netscape's current market position.

But those days are gone. Even though Microsoft has escaped its anti-trust woes with wrist-slaps, the experience frightened them so much that they've castrated themselves. They're apparently no longer do what's necessary to bring a competitor down.

Instead, Microsoft is trying to use brand marketing to save themselves from an existential threat.

It's not going to work, and Microsoft's decline as the dominant force in business applications is now probably inevitable.

Consider this: today's papers are full of the news that GM -- another company that tried to brand itself out of an existential threat -- is declaring bankruptcy. (See "What Killed GM? Brand Marketing!")

In ten years... who knows?

Maybe taxpayers will be bailing out Microsoft.

READERS: Comments welcome, naturally...