If I Were Running Microsoft…

By Aaron Goldman, VP of Marketing & Strategic Partnerships
Appeared in: MediaPost's Search Insider

After going gangbusters as the Google godfather, I’d like to continue my delusions of grandeur by assuming the role ruling the Redmond roost. Once again, my M.O. is that money doesn’t matter.

1. Buy Yahoo’s search assets. Let’s just get it over with already. Not only will Microsoft gain 20% share in U.S. search, it will inherit a bevy of talented employees — yes, there are still plenty left — that are battle-tested in operating a search media property. As I’ve stated before, what Yahoo lacks in technological prowess, Microsoft has, and what Microsoft lacks in media experience, Yahoo has. But buying all of Yahoo is not the answer. Besides the time it would take to clear the DOJ, we’re talking years of integration work.

2. Buy AOL. AOL is ripe for the picking. An acquisition here would add 4% search share to Microsoft but, more importantly, steal 4% from Google syndication, making it a net 8% gain. AOL also has some nice assets under the Platform A umbrella that would bolster Microsoft’s reach, targeting, and optimization capabilities. Patching Platform A into adCenter would give Microsoft the scale needed to maximize holistic search and display campaigns and give it a leg up over Google, which still has not made a meaningful play in the display world.

3. Buy Ask.com. Hey we’re on a roll. Why stop now? IAC is ready to be unbundled. so it should be easy to peel off Ask. This would be another 8% net share gain proposition, leaving the U.S. search score at 62/38 in Google’s favor.

4. Buy Vibrant Media and KallOut While Cashback might be helping incrementally, once the acquisition spree is done, it’s unlikely Live Search will be able to gain any further significant share. As Gord Hotchkiss has explained, the Google habit is well-formed. It’s time to turn the focus to alternative search starting points. Vibrant and KallOut have both created new search inventory by activating keywords in content — Vibrant through hyperlinked text and corresponding ads and KallOut by allowing you to highlight any string of words and get instant search results. Getting to people before they get to Google is the best way to continue to close the gap once the Tier 1 engines are consolidated.

5. Activate the social graph via Facebook search. Acquisition is a good short-term way to grow search share but is not sustainable. Unless Live Search gets smarter, it will never overtake Google. One way to make search smarter is to activate the social graph. With the deal to power Facebook Web search now locked up, let’s tweak the algo to show personalized results based on the activity of a person’s network. When I perform a search, show me what percentage of my friends clicked on each listing when conducting a similar query. And, if the query is commercial, show me what products my friends ended up buying.

6. Invest heavily in MyLifeBits. Now that we’ve made search smarter, let’s make it more useful. MyLifeBits is a Microsoft-funded project I’ve become quite enamored with. I’ve written three Search Insider columns on it already, but the short story is that MyLifeBits is a memex (memory extender) created by digitizing and indexing an individual’s entire life — emails, phone calls, pictures, etc. In turn, all of this information becomes searchable and accessible anywhere at anytime. Mash this up with Powerset, and we’re within reach of the true potential of Tim Berners-Lee’s Semantic Web.

7. Make Atlas free and Build in Web analytics. Here’s a chance to trump Google before it can get its act together with DoubleClick and truly create an OS for online advertising. Relaunching Atlas as a free tool and folding in Web analytics capabilities will attract small and medium-sized businesses, especially if there’s integration with other Microsoft Office products. Tie in adCenter and AdECN, and marketers will be able to purchase media directly from the system. The ad revenue generated by the long tail here will surely outweigh the pennies per impression lost from ad serving.

8. Buy Backchannelmedia and bring search-like ads to TV. After sewing up the online media marketplace, it’s time to turn our attention to traditional media. Steve Ballmer has already proclaimed that all media will be delivered and consumed digitally in 10 years. To capitalize on that vision, we’ll need to introduce the SEM principles of one-to-one targeting and consumer-initiation to TV advertising. The purchase of Navic Networks is a step in that direction. Microsoft is already playing with interactive video technology that could help here. Add Backchannelmedia into the mix and users can interact with TV content and click on ads with no special equipment needed.

9. Sell Avenue A / Razorfish. I never understood why Microsoft was able to hang onto Ave A but everyone was up in arms until Google divested Performics. This is a complete conflict of interest. Ave A buys media from Microsoft and builds optimized Web sites for Live Search. I don’t care what kind of firewalls you put up between these groups, it’s impossible for Ave A to be impartial when creating media plans when its financial health is tied to Microsoft’s profit. And vice versa with Microsoft’s incentive to help Ave A succeed in the SEO space.

10. Spin off the Advertising and Publisher Solutions (APS) group. Now that we’ve amassed a digital media powerhouse, we’ll need to allow it to flourish without being shackled by the bureaucracy and financial pressures of a stodgy, old software company. With the advent of cloud computing, the days are numbered for software programs. Over the next five to 10 years, we’ll see increased pressure on Microsoft to meet volume and margin requirements from its bread and butter products. Accordingly, all eyes will turn to APS to replace the revenue. This will place great strain on the group to deliver short-term results rather than continue to place bets for the future.

Now enough WWAGD. What would you do?