Ouch! You've Been Live Branded

Today, he observes that Windows Live search is the only major search service with declining market share. On Tuesday, he whacked Microsoft for flubbing Live branding.

Yeah Live is a mess, but contrary to speculation elsewhere, the Live brand isn't dead. That's not to say it should ever have been born.

I remember speaking with Microsoft product managers before the Live brand was unveiled. Microsoft had its reasons--there are always reasons--for sidelining MSN as an established brand in favor of Live. Some of those reasons had to do with customer responsiveness to Office and Windows as brands. I didn't buy the logic, and I still don't. The only reason that made sense was the one Microsoft didn't state: bringing services to businesses, which wouldn't work well with a consumer brand like MSN.

Microsoft also envisioned Live as a way of extending the Office and Windows brands to the Web and keeping the platforms vital. Product cycles for Live products and services were supposed to be much faster than either Office and Windows.

Clearly Live isn't working out as well as Microsoft had hoped, and there are plenty of reasons:

• Building a new brand takes time. Microsoft managers may believe in the appeal of the Office and Windows brands, but Live makes for something new. New branding requires lots of supporting marketing and time to build meaningful equity.
• Live is too much MSN with a new label. The majority of Live products or services either existed under MSN or, if new, aren't that original. Microsoft can only imitate Google for so long. When I survey the landscape of new Live products, the majority are knockoffs of something released by Google or another Web platform company. As for the stuff kicked over from MSN, a new label doesn't make for a successful product.
• Microsoft fumbled at the worst possible time. The company chose to build its search technology and advertising platform, just as Google really gained momentum. Maybe if Yahoo had done better competing with Google, Microsoft would have had time enough to get its stuff to market. But Google greatly benefited from mistakes made by both its closest search rivals. In December, according to Nielsen//NetRatings, Google search share topped 50 percent, more than double Yahoo. Microsoft came in, even at No. 3, with a paltry 8.4 percent.
• Microsoft is paralyzed by organizational uncertainty. Executive exits and changes coupled with a couple corporate reorganizations over the past 18 months have sucked some life out of Live. Some of the people responsible for the Live brand strategy are no longer involved in the process. Unless incoming chief software architect Ray Ozzie takes leadership and ownership for Live, it's hard to see how the situation can quickly improve.

Declining search share and branding problems are big trouble for Microsoft.

While search isn't working, display advertising is better. Last week, Microsoft reported improvements in display advertising. I strongly suspect, the network of Live properties is a major factor benefiting display advertising. From a revenue perspective, Microsoft created Live real estate for placing Internet billboards, so to speak.

If Live were to see its "It's a Wonderful Life" world of never having born, there might not be a happy ending. It's hard to see who would be worse off if Live had never been.

Killing off Live wouldn't make much sense either, which maybe is why changes are clearly afoot. Microsoft is grappling with its Live problems. Future direction is somewhat uncertain because internally Microsoft hasn't resolved Live's future direction, or so I'm hearing from sources close to the company.

One scenario would put Live at the center as it's own brand somewhat detached from other products--so Live at Windows instead of Windows Live. I'm no fan of that approach. Another approach would be the one underway right now, where Microsoft slaps its four-color flag log and "Windows Live" or "Powered by Windows Live" on various products or services. Microsoft Messenger for the Mac 6.01 carries the former and the Windows Vista product page carries the latter. The "Powered by Windows Live" generally applies to search, including special search macros.

Time is running out for Live, such that it could just die on its own. Microsoft ventured down the services path seven years ago with the ill-fated "HailStorm," later renamed .NET My Services. Live isn't dead yet, but it could well be soon.