Microsoft Live: Failing To Get the Word Out, and Failing Marketing 101 in the Process

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 |  About: Microsoft Corporation (MSFT)
by: Yankee Group

By Carl Howe

Mary Jo Foley over at ZDNet gives Microsoft (NASDAQ:MSFT) a mixed report card for its year-old Live initiative. Given that Ray Ozzie noted that Live and associated Internet services are the single most important initiative at Microsoft, I think this comment illustrates just how mixed this report card is, especially regarding how Live is being marketed:

I think the branding of Live has been confusing,” said Directions on Microsoft analyst Matt Rosoff. “It seems like end-users who don't particularly follow Microsoft have never heard of Live or confuse it with the next version of Windows, and customers, partners, and advertisers often express puzzlement over the difference between Windows Live, Live (e.g., Live Search), and MSN. The developer strategy for Live still hasn't seemed to gel very well, either.”

Microsoft has used ‘Live’ to mean several different things, Rosoff added. “We (Directions on Microsoft) view Windows Live as Microsoft's latest consumer online strategy, essentially the latest chapter in the long story of MSN. But sometimes the Live brand is also used to describe broader concepts, such as software being delivered as a service or subscription-based models for buying software. I don't think the brand has been as misused as .Net was a few years back, but it's still fairly indistinct.”

Now that's what I call poor branding: most users have never heard of it, and those that have get the definition wrong. But it is really one of Microsoft's Most Valuable Professionals who nails the real issue:

"I think all that is clear but what I disagree with is Microsoft's ongoing silence about Windows Live, its definition, its goals etc.,” LeBlanc continued. “I think this problem lies with the guys in the higher ranks on top of what seems to be endless shifting of ‘re-orgs.’ I think it’s time to stop and have some of the bigwigs come out and talk about what Windows Live is, what is important, and how Microsoft is working to meet its goals for Windows Live.”

And maybe have them all say the same thing, too. But no, they won't even talk about it, as Mary Jo notes:

Sources close to the company say Microsoft doesn’t want to talk about Live for a variety of reasons. Most of the Live family of services remain in beta. (But since when does Microsoft refuse to talk about vaporware or unfinished products? Why the reticence now?) Not all of the Live properties have been as thoroughly beta-tested as Microsoft officials tend to like. (But hey, Google’s (NASDAQ:GOOG) out there bragging about having the lowest ratio of testers to developers in the industry! What have you got to lose, Microsoft?) Microsoft doesn’t want to give its competitors a leg up, by offering too many details about its unfinished products and evolving strategies. (Again, since when has that stopped the Redmondians from attempting to freeze markets by talking about products when they are little more than drawing-board concepts?)

The bottom line: Microsoft entered the market, not because they had a plan for delivering value to users, but because someone else was making money there. And since this wasn't intended to fulfill any specific need, there is no marketing message for the initiative, even though it's the most important thing they are doing. And with no marketing, you can bet those grades -- and their related financial losses -- aren't going to improve either.

Is it any wonder this company is floundering?