Foley on Microsoft

Breathing New Life into Microsoft 'Live'

After a frenzied start, why is Live now laying low?

• By Mary Jo Foley
• 01/01/2007

If my answer were yes, that would be the end of this column. But I don't think Live is fading from view. Instead, I'd argue that Microsoft is in the midst of some serious soul-searching and course-reversal in terms of what Live is and where it's going. It's still definitely going somewhere, and will become increasingly important to the company's future as time passes.

Microsoft launched its "Live" master plan, with much fanfare, just over a year ago. In the following months, the Windows, Office and CRM Live teams rolled out a staggering number of Live point products -- by my count, more than 40 beta, if not final, releases.

Then the momentum all but stopped. The pace of new product releases slowed. Many of the expected services we knew by code name only (LiveDrive, Live Search Translation, Live publishing portal, etc.) failed to materialize. Microsoft's stated intent to flesh out its Windows Live developer strategy at the Mix '06 conference in March 2006 has stalled.

Microsoft is still working toward the ideal that Live will become a way for Microsoft to maintain its "fat client" (and server) legacy, while still providing some of the most compelling "Software as a Service" functionality in which at least some group of customers is seemingly interested.

So what's behind the Live cool down? I have a few theories:

There's a new Live sheriff in town. And he's one that likes to shoot first and ask questions later. Steven Sinofsky, senior vice president of Windows and Windows Live Engineering, is a guy who likes to under-promise and over-deliver -- not the other way around. Plugging informational leaks is one of his hallmarks. Is it any wonder, as the Windows Live watchers over on LiveSide.net recently noted, that most of the existing Windows Live blogs "only talk about vacation plans or gingerbread recipes" these days?

Microsoft has realized it can't beat Google in search, so it needs to downplay the importance of it. When Microsoft first went public with its Live vision, the majority of its services and strategies revolved around becoming a search player on par with Google. But if you listen to recent Microsoft speeches about Live, Microsoft execs now are delivering a very different message. At a mid-December Lehman Brothers Technology Conference, Steve Berkowitz, senior vice president of Microsoft's Online Services unit, told Wall Street analysts that search had become a commodity, and that it was "sticky apps" and "user experiences" that ultimately win advertisers' -- and consumers' -- hearts and minds.

The company is scrambling to regain control of its too-rapidly proliferating family of Live services. Like Google, Microsoft has realized it needs to pare down its burgeoning list of services and focus on the ones most likely to generate revenues. Much was made of Google's decision in early December to kill Google Answers. But word is the Windows Live team is in the midst of its own purge. The possible downside? Windows Live could end up looking more like the old MSN than the new, innovative and agile services factory it initially seemed to be.

Microsoft can't figure out how to convey its Live strategy shifts to Wall Street (and its customers) so that it won't set off a round of panic. While we're on the topic of MSN, it's a little known fact that Microsoft quietly decided a couple of months ago to rescue its entertainment portal and bring it back to relevance. Earlier this year, Microsoft was on the verge of letting MSN simply wither away. But then someone inside realized that by doing so, Microsoft would let 465 million unique visitors per month slip through its fingers. The new goal is to push MSN users toward the various Live properties and convince them of the benefits of Live Messenger, Live Mail and Live Spaces.

It surprises me when I hear Live dismissed as little more than a branding strategy. Sure, Live is complex and constantly evolving. But it's also where Microsoft will be putting much of its marketing muscle and brainpower in the coming years.

What's your take? Write me at [email protected].