Blog Post

Microsoft’s Lessons From Failures in Consumer Business

(sub. req.): A very interesting story on Microsoft’s steps to put on a consumer friendly face…case in point, MSN. Yusuf Mehdi, head of MSN, says Microsoft was not geared up to serve mass-market consumers when it set out to challenge AOL in internet services: “Where we have not excelled is in end-to-end experiences. We’ve taken our bumps and bruises learning to do this well.”

Microsoft’s shortcomings in the consumer market can be traced to several causes.

One has been a tendency to stray into new products or services where it does not have expertise. That is clearest with the MSN, which has been through a tortuous series of strategic shifts. “MSN is kind of a strange beast, it has changed business so many times,” says Matt Rosoff, an analyst at Directions on Microsoft, an independent research firm. MSN has at different times set out to produce its own entertainment “content” and to provide internet access, which was essentially a communications function.

To reflect that shift MSN, once run as a largely autonomous division, has been integrated more closely with the software development teams around which Microsoft has traditionally been organised.