When the next set of Internet business histories gets published, I think that a lot of people are going to look at the time period between 2000 and 2005 and conclude that it was a really important time for the development of Internet businesses. Yahoo! successfully re-established its cool and remade itself as a media company. Google emerged as a powerhouse. AskJeeves somehow made itself relevant again. eBay just kept growing and growing. And AOL continued to slide. Who’s missing from this account? Microsoft.
I have been scratching my head for awhile on this topic. When things for the consumer Internet started to look awful, Yahoo! made some big moves. They started laying the foundation for their move toward being a media company (read: Terry Semel gets hired) and scooped up Overture for good measure. Google was getting on track with AdWords. eBay picked up PayPal, which looks rather shrewd in retrospect. AOL kind of floundered around. But what did Microsoft do? I can’t figure it out. They were sitting on a ton of cash. Sure they had the ever-present fear of litigation (anti-trust and otherwise) still hanging over their heads, but that seems to have been a constant reality for them for the past decade. By late 2000 I am sure they must have figured out how to operate in such a world. From what I can tell, having never worked at Microsoft nor asked my friends who were there at the time, Microsoft pretty much ignored the opportunity to stake out some turf in the consumer Internet and went after games (Xbox) and its traditional business (Longhorn/Vista, Great Plains, etc.). They released rather ho-hum updates to Hotmail, Messenger, and the MSN service. But as far as I can tell, they didn’t really do anything interesting, whether it was homegrown or acquired. Nothing really cool or noteworthy in search. Ditto on e-commerce, content sharing (music or photo), or community. I have to believe that there was some subset of people in Microsoft who were beating the drum about seizing the day in the consumer space during that time period. It appears that they did not prevail.
I am not counting Microsoft out – that would be foolish. But I wonder whether history will show that they missed out on a critical chance to establish a stronger position in the consumer Internet during the dark ages of 2000-2005. Yahoo!, eBay, and Google certainly made moves to do so.
As always, you can email me at blog at charleshudson.net.