Steve Ballmer was in Brazil last week at the University of Sao Paulo talking about the new release of Live Messenger, formerly MSN Messenger.  It has a new social networking focus, which I am sure is cool as everything Microsoft is doing lately for consumers has a social networking component.  It did get me to thinking about Windows Live and MSN and how it evolved while I was at Microsoft. When I look back at the legacy of the internet and how Microsoft responded one group always stands out to me: MSN.  It is an interesting journey.  The original MSN (Microsoft Network) debuted back in August of 1995.  It was to coincide with the release of Windows 95.  To put this all into perspective both MSN and Windows 95 were designed and released without the internet in mind.  To my younger readers, yes there was a world without the internet.   Since that time MSN has changed direction so many times it was even hard internally to keep track of what they were doing or where they were going. 

 The original MSN was built to compete with AOL and CompuServe.  These were what we called “walled garden” services.  What this meant was as a MSN or AOL partner I would sign up to deliver my services over their particular network.  When I went to AOL I got options for all sorts of things.  It could be “Mama’s cookie recipes'” or “Bob’s train collectible’s”, the point being these were only available to AOL subscribers.  When Microsoft in 1996 announced MSN 2.0 it was apparent right away the impact the Internet was having.  All these partners who had signed up for the walled garden approach came to Redmond and were told, the internet is the future and you are all on your own.

It was around 1999/2000 that the group I was in was briefly re-organized under MSN.  At the time MSN was being led by Brad Chase (Windows 95 fame) and Jon DeVaan, an engineer.  Thomas Koll was our VP for what was then the Network Service Provider Group (NSP).  We were introduced to the new organization at the Bellevue Convention Center.  Brad was the “showman” so he did most of the talking.  Jon was an engineer, did I already say that?  Brad talked about MSN as “The comeback kids”.  In order to have a “comeback”, you had to have achieved some measure of success in the past.   Something MSN had not really experienced. Everything Brad talked about was very consumer focused.  The NSP folks in the audience were Business Development people used to doing deals with large Telco’s and Network Equipment Providers.   We were like deer in headlights.  Speechless and confused.  It was apparent in the weeks following that Thomas pleaded with someone  to change this pending train wreck.  But I can say for at least 2 weeks I was a part of MSN.

At Microsoft MSN was its own entity doing its own thing.  This was highlighted more or less by Microsoft’s move into mobile phones.  The mobile phone folks believed in a world on windows.  The MSN folks just wanted to be a relative service, regardless of the platform.  The mobile world had a lot of different platforms, which Google, AOL and Yahoo played on all of them  – Symbian, Palm, RIM, Windows Mobile etc..They were offering services lile instant messaging, email and search.  Needless to say the MSN folks did this as well across all platforms.  The Windows mobile guys working with the wireless carriers did not like this one bit and only wanted those services available on the Microsoft based phones.  What happened then was the MSN mobile team  and Windows Mobile team each went into the carriers alone to strike their own deal.  The wireless carriers were confused as to whom they should be working with at Microsoft.  At the same time Bill Gates was out their talking about integrated innovation and better together.  Problem was internal politics (to this day) did not allow for that to happen.  On this issue I will be honest I was with the MSN folks, I did not ever understand the logic of the Windows Mobile groups thinking.  I am sure Microsoft is not unique in these type of political plays, but in the end the results are all the same, the customer loses.

When the internet changed yet again with services like Google and Yahoo! starting to dominate the Internet landscape it seemed ripe for change yet again in MSN land.  In particular like I highlighted in my earlier blog post on  Google, search was now the big game changing beast on the internet so Microsoft jumped on board and launched Live in 2005.  The search strategy was owned at Microsoft by MSN.  As is usually the case when Microsoft thinks too much the whole Live branding experience (Live Search, Live ID, Live Messenger etc..)  was a bust.  The common thing you heard was that Google was a verb and how do you compete with that.  As I have said before Microsoft is not good at sex and sizzle.  The whole Live strategy I found confusing the fact that it still lives on, even now after the launch of Bing, has made the brand even more confusing to me.  To muddle things even more according to Alexa Live search still ranks higher than Bing at #5 while Bing sits at #24.  I believe that is a big challenge when Microsoft changes strategies that before they compete effectively they have to undo what they have already marketed to consumers. 

I guess this brings me back to Sao Paulo and the new Live Messenger.  When I read it, it made me realize l do not know where the whole Live brand fits in overall to what Microsoft is trying to accomplish against Google.  I probably should since I worked at Microsoft for 18 years, maybe I did not pay close enough attention, but if I can’t make sense of it how can consumers??

In the end MSN has been through a lot in its now 15 year history at Microsoft.  They have had downs and they have had some slight ups.  Though those ups rarely happened around earnings season.  They continue to try new things and drive new revenue streams (advertising driven revenue).  They have seen every trend the internet has thrown their way and failed more times than I can remember (Anyone ever use Soapbox?  It was the YouTube killer…I am being serious).  They need an infusion of youth to help them think ahead of the curve.  Bringing in veteran’s of Microsoft leads to old ways of thinking.  They need a Sun Tzu moment where they change the playing field otherwise they will continue to follow.  Until they do they will…well they will just continue to be the same old MSN.  Or as Bruce Springsteen was sang about  MSN (not really it was his marriage) “One step forward, two steps back”.

Good Night and Good Luck

Hans Hoffmann May 6th 2010