“Bungled branding” of Live services has hurt Microsoft, CNet News.com reports

In an article following the release of Microsoft’s First Quarter Earnings Report, CNET News.com reports that “Microsoft’s Live branding has been tremendously confusing and has hurt the company”.  According to the article:

“While Microsoft doesn’t break out the financial figures for its new Live services from its established MSN content services, both of which make up its Internet services business, it’s likely the newer brand is what is weighing things down.

“Microsoft’s Live branding has been tremendously confusing and has hurt the company, and it is very likely contributing to the situation they are in right now,” said David Smith, an analyst at Gartner. “They’ve created another brand and have not differentiated it.”

It’s too early to pass “final judgment” on the strategy, Smith said. But now is the time for Microsoft to clearly explain its strategy, he said.”

In a related article, also on News.com, while Microsoft continues to invest heavily in search, they admit to losing market share:

“On the search side you are correct we lost market share,” Microsoft CFO Chris Liddell said in response to an analyst’s question on the company’s earnings conference call. He said he is “clearly not happy with that.”

Liddell said Microsoft continues to “take a long-term view of this business” and that the company is making progress in some areas. The company also hopes this year to turn the tide in its revenue per search query. “We still expect to get revenue per search equal to where we were a year ago by the end of this year,” he said.

Microsoft continues to take a long term approach to Live services, and as we have been saying at LiveSide, it’s still very early in the game.  We’ve also said however that the approach to Windows Live branding has been unclear.  We agree with Gartner’s Smith that the time is now to clearly explain Windows Live brand.