Microsoft Searches for EU's Good Will
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News Commentary. Microsoft's European "buy local" strategy just might work. |
Today, as part of his five-country European tour, Steve Ballmer announced the opening of a search center, with operations in London, Munich and Paris.
"The Search Technology Centre is an important step forward in our long-term strategy to invest in local development of search technology in Europe," Microsoft's CEO said in a statement. "We believe search is still in its infancy. Developers at the Search Technology Centre will play a key role in helping us redefine search as they create new search products and services for consumers and advertisers here in Europe and around the world."
Talking about search as an infant is good marketing FUD, wishful thinking and downright corporate denial. Google has firmly established itself as the search leader, and all Microsoft's talk about new user interfaces and natural language search has led to no new search innovations.
Microsoft's problems with Google are a whole lot worse on the continent than they are here. For example, according to ComScore, Google's search share was 79.8 percent in Germany for July. Microsoft: 1 percent. In June, Google's search share in United Kingdom was 75.3 percent compared with Microsoft's 3.4 percent. In the United States, Google's search share reached 63 percent in August, according to ComScore, while Microsoft had 8.3 percent share. Maybe Microsoft's search is in its infancy, but Google's is quite grown up.
Still, there is substance in today's announcement: local investment. Microsoft is spreading the corporate love to not one but three Western European countries. The investment comes in a hot technology area that's sure to mean continued investment and even innovative products coming from European researchers—albeit through an American company.
Microsoft is spreading the wealth during uncertain economic times—no less on the continent than here. Microsoft's investment generates tax revenue (presumably, if no special deals were cut), employs white collar workers, creates business for channel partners and other third parties and communicates the company's commitment to its European customers. One way business gives back is by locally creating jobs.
How touching: "Increasingly, we are finding the talent we need here in Europe," Steve said in the statement. "To tap into that talent, we've invested in research and development across the region and today, Europe is second only to the United States in the number of engineers and researchers we have working on creating innovative products and services."
Local investment is not a new Microsoft strategy. But it's worth highlighting again because of uncertainty: wobbling world economies, Europe's open-source revolt against Microsoft and ongoing antitrust matters on the continent.
[Please send your tips or rumors to watchtips at live.com.]
Comments (14)
Mr. Ballmer will absolutely love Munich, the entire city government is using Linux. Hide all the chairs!
Posted by Ralph | October 2, 2008 12:50 PM
Joe - you have become so negative in everything you cover on Microsoft. It is hard on the web to tell who is a reporter and who is columnist. You clearly are not a reporter. I read your stuff all the time, but your last two posts have finally convinced me to remove your RSS feed from my reader.
Best of Luck.
Posted by Kevin | October 2, 2008 1:24 PM
@Ralph
yeah, how many years late and $M's over budget is that now anyway? And are they still running Windows and Windows apps in emulation too?
Posted by paul | October 2, 2008 1:43 PM
paul : wrote
@Ralph
"yeah, how many years late and $M's over budget is that now anyway? And are they still running Windows and Windows apps in emulation too?"
-----------------------------------------------------
Chances are that they modified things so that they don't even need any Windows emulation or anything at all Windows related. They planned this in 2003 and nearly finished up about this year or so.
It has saved them a lot from huge licensing fees. If they needed Windows apps, there is Codeweavers or virtualization on the few computers that may need them...if at all.
http://www.heise.de/english/newsticker/news/80071
Posted by Ralph | October 2, 2008 2:10 PM
Kevin wrote: "Joe - you have become so negative in everything you cover on Microsoft...your last two posts have finally convinced me to remove your RSS feed from my reader."
I'm confused, Kevin.
What's negative about saying that Microsoft's local investments make sense?
Joe
Posted by Joe | October 2, 2008 2:18 PM
Wow. Kevin. You think this is 'negative' ? Eh ?
I mean, there's poor Joe trying to talk up MS's Search initiative - and heres a product with 1-3 PER CENT market penetration.
Oh - lets all talk about Oracle Enterprise Mail, or OS/2 based Spreadsheets, or perhaps computing strategy on the island of Rockall. Other 1-3% market share items.
Mate, I would have been far far more negative, dismissing MS's local 'spend' as just a way of keeping money out of the US whilst in the middle of a plummeting economy.
Toyota does that in Europe, after the Yen tanked in the 90s - and now has enough cash on hand to buy Ford.
Why bring the money back to Borg-central if it isnt worth the paper its printed on?
---* Bill
Posted by Bill | October 3, 2008 7:50 AM
Microsoft's problem with search is that they can't buy market share or FUD the users. It's an activity on the internet that is not software dependent.
Even grandmother will look at search result and say, "That's right!" or "Not even close." With Microsoft's search the user just always feels he/she isn't getting the right answer.
Posted by Just-a-drone | October 3, 2008 9:50 AM
@Just-a-drone:
Re: "Microsoft's problem with search is that they can't buy market share or FUD the users."
YES!!! You've said it far better and more clearly than I have been able to!
And no matter how little people know, or even care to know, the differences between versions of Windows or Mac or Linux, they know Google. Nearly everyone in the world uses "to Google" as a verb that means "to search".
And that deep market penetration was bought with results, not money, bribes, or back-room strong-arm deals.
Posted by Philosopher | October 3, 2008 10:19 AM
@Kevin Theres a saying here that goes "You cant polish dog sh*t" - If MS has completely failed on the area of searching the net, whats Joe supposed to report?
Would you rather he lied?
Or how about, he just doesnt report the bad bits about Microsoft and we go down the censorship route?
Kevin, you must live under a rock if you believe all is happy and fluffy in the world of MS. Maybe you should visit the MS site instead, theres not a bad word to be found there.
Dont worry Kevin, Linux will be waiting for you when you wake up out of your MS dreamworld.
Posted by Goblin | October 3, 2008 2:18 PM
Joe's last paragraph is a good one:
"Local investment is not a new Microsoft strategy. But it's worth highlighting again because of uncertainty: wobbling world economies, Europe's open-source revolt against Microsoft and ongoing antitrust matters on the continent."
But I am not sure it is an "open-source revolt against MS," but rather an "open-standards revolt," and a "fair competition revolt" by the powers that be, the EU. So I would expect this strategy to fail. Not only that but Media Player is still being bundled last time I looked with Vista, seems like another possible court case and fine in the EU to me. Expect at some point for the EU to come down on MS for the bundling of Media Player, Internet Exploder, and Outlook. None of these programs need to be "bundled" with Windows.
Posted by chips b malroy | October 3, 2008 3:22 PM
my dream is just running Vista, it is the world's superior OS!
Posted by Philosopher | October 5, 2008 12:18 AM
@Philosopher: a computer with enough power to run vista has yet to be invented. quantum computing could let us see at least the boot screen within this century, but seeing the desktop... wow... we'll probably never get to see it in our lifetime. we should keep dreaming...
Posted by Chippy | October 5, 2008 11:51 PM
Joe, your article is proof that MSFT cannot abandon European markets when the EU decides to further fine the heck out of them. As here they are, still putting more money and resources into Europe. The future of MSFT, may very well be decided in the courts of the EU, rather in Redmond.
Posted by The Hand | October 6, 2008 4:15 PM
Even grandmother will look at search result and say, "That's right!" or "Not even close." With Microsoft's search the user just always feels he/she isn't getting the right answer.
Posted by seks | October 7, 2008 11:27 AM