The Microsoft-Yahoo! deal, when and if it is finalized, will bring on many changes to branding across offerings from both companies. Some have speculated on the end of Windows Live, replacing it with the Yahoo! brand, but I don’t think so. Microsoft’s strategy to use Windows Live as a value add on top of Windows is a good one. For one thing it keeps the EU and the US Justice Department at bay, for another it allows the Windows team to focus on the core operating system and leave add-ons like Mail and Photo Gallery to Windows Live, and it allows Windows to morph into a cleaner, leaner operating system more suited to media mobile devices and the appliances of the future.
Of course there are a thousand possibilities for what might happen in the months to come (and Microsoft expects the Yahoo! deal to happen in Q3 2008). Here’s my take: Yahoo! becomes the online brand, replacing MSN.com for content services, and even possibly combining mail and messenger, utilizing the strength of the Yahoo! name and cleaning up some of the residual Windows Live mess. That would allow Windows Live to continue to deliver value adds for Windows (Windows Live Mail, Windows Live Photo Gallery, Windows Live Writer, etc). Office Live of course will remain, and what happens with branding for cloud storage and file synch services such as SkyDrive, Foldershare, and the upcoming Horizon we’ll have to wait and see. Or not, but expect Windows Live to continue in some form, and Microsoft to make full use of the strength of the Yahoo! brand.
What most pundits who have chimed in on the acquisition news haven’t grasped is that Microsoft plans are more far ranging than just some deranged mania bent on catching Google. Let’s stop for a minute and look at the current state of affairs. For Google, search drives almost all of its revenue. Google counts on consumers looking for products online to search for them using Google, and to then buy them by clicking on ads. There’s an inherent problem with this model, that there is no compelling reason to utilize Google if you aren’t searching for something. Now obviously lots of folks are looking for products, based on Google’s revenues. However, as proficient and dominant as Google is, it’s easier to build a world class search product than it is to build a world class content network. The music and television industries are rapidly giving way to content provided over the internet, content that will drive web traffic in increasing numbers, with Google having little to offer other than a clean white search box and 10 blue lines.
What Microsoft is betting on, and what the Yahoo! acquisition puts it in position to deliver, is in the provision of next generation content to the web. Content with a rich advertising model far surpassing what Ray Ozzie condescendingly referred to as the “10 blue lines” of Google’s text ads, and integrating search of a quality to equal Google’s built into that content in a seamless and convenient way. This isn’t about building a Google competitor that copies the model and hopes to catch up, its about building a new model that will better serve both users and advertisers. And it isn’t about beating Google, it’s about leapfrogging Google into the next generation of online advertising.
But while all of this is occurring, Microsoft needs to do something about search in its present form, and indeed there are plans, soon to be unveiled, that will do just that. Microsoft has had a plan to re-brand Live Search for some time now, we first heard about it early last fall. There was some talk of making the move with Searchification, the update to Live Search that took place last September, but instead it won’t come until the next main bi-annual search update, which we’re hearing will be April (regular disclaimer applies). Security is tight around the new brand name, which has already been chosen, and internally it is being referred to as Rome.com, a placeholder code name. Ina Fried picked up on Steve Ballmer using it in Microsoft’s latest SEC filing today, though the only information he and Kevin Johnson gave was that it would be ready for a “release in the Spring”.
Re-branding Live Search on its own, without the Yahoo! acquisition, would be a move ripe for derision by Microsoft’s detractors, seen as another flailing attempt to make a move on Google. But a new brand combining Live Search with Yahoo!, when it comes on board, makes much more sense. The new brand, with new market share and the combined engineering talents of Microsoft and Yahoo!, would lead the way in restructuring Microsoft’s live services to accomodate the inclusion of Yahoo!. And for those who dwell in the past at Microsoft’s laughable naming conventions, consider Silverlight and Popfly and a new generation of Microsoft branding, and that Live Search has already been disassociated with the Windows Live brand, possibly in preparation for exactly this move. With the need to consolidate search products as the top priority once the Yahoo! acquisition is in place, a move now to establish a new brand, neither Live Search or Yahoo! but a new brand for a new generation of search, comes at the right time.
Oh and if you wondering about the choice of Rome as a codename, the well known phrase “Rome wasn’t built in a day” gives some pretty good background.