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You’ve probably seen the announcement by now:  Microsoft is buying Skype.

I like Skype.  A lot.  I’m depressed.

My initial thought was:  how long before Microsoft runs it into the ground?  Microsoft has been all over the road.  Ray Ozzie, their supposed visionary, has left the building.  They’re increasingly being seen as an dinosaur.  The large, nimble giant is now a lumbering, aimlessly wandering giant.  And Steve Ballmer’s answer?  Bury your head in the sand, and just keep pounding the same Windows beat…

I was pondering all of this after hearing the Skype news and had a revelation.

I used to be a big Microsoft fan.  I made my living for 25 years by developing Windows software.  I hated Macs and wished they would just go away already.  Today I work on OSX exclusively and wouldn’t use a Windows machine if it were GIVEN to me.   What changed?  What happened?   I think I know.  And it’s a huge, fundamental problem.  I have not seen anyone pick up on this yet — this is entirely my opinion, right or wrong.  Here goes:

They reached their goal, and have no clear vision anymore!

That’s it.  That’s the problem:  they’re done.

Allow me to explain.

Since the earliest days of Microsoft, when they were just a handful of guys teetering on the verge of bankruptcy in dusty New Mexico, they had a vision.  A vision driven by their Founder, Bill Gates:   A computer on every desktop, running Microsoft software.

That was their mantra.  And they worked towards global domination.

But a funny thing happened:  they achieved it!    Now what?  There’s no “new” vision.  Now all they’re doing is trying to hang on.  Maintain marketshare.  Maintain earnings.  Please Wall Street.

If you stop and look at the “movers and shakers”, they are all on a mission to accomplish something.   Facebook wants to connect everyone in the world and create the social web.  Google is out to make it easier for individuals to find stuff.  And so forth.

So Microsoft is out chasing Google.  What’s Google doing?  They’re trying to help people find stuff faster, easier.  Why did they buy YouTube?  Because it’s one of the largest search engines on the planet outside of Google.  People searching for videos.   Why did they launch Google Maps?  To help people find places.  Why are they getting into mobile?  To help people find stuff faster and easier on the go.  And so forth.

Microsoft really does not have a clear vision or raison d’etre anymore, and they can only hold on to marketshare for so long, fending off the wolves.  They have massive cash reserves (that are about $8 billion lighter now), so they can wait it out a while yet. And they do have some cash cows still.  But their heyday has long since passed.   Mark my words.  It’s all downhill from here.

Well, today I saw an interesting blog post quietly slide by, almost unnoticed.  Google waved “Bye, Bye” to Google Wave.

This comes fairly close on the heels of another similar non-announcement: Google quietly killed its heralded Nexus One smartphone.

These two back-to-back dismal outings brought to mind a bevy of other non-starters by Google as well, such as the Orkut social network,  GoogleTalk (while Skype, AIM and Yahoo! IM flourish, does anyone actually use GoogleTalk as their primary IM software?  I certainly don’t know anyone who does), the municipal WiFi projects, and so forth.

I have somewhat mixed feelings on this.  On the one hand, I do understand the desire to “extend the brand” and get into other related markets.  Certainly Apple has done well with it’s iPod line of MP3 players.  They created a device that integrates well with its line of personal computer hardware and software for a seemless experience and now, years later, it’s a major bohemoth in the music industry.  Mp3 Players begat phones with iPods integrated, and so forth.  And it all works together as a single ecosystem to drive the popularity of its core computing business.  Indeed, Apple has seen it’s PC market share skyrocket in recent years as a result.  It’s the old “…as the pond rises, so do all boats” concept that I personally believe in very strongly.

However, extending the brand into related areas is one thing.  Jumping feet-first into entirely new areas that are NOT related to one’s core competencies is a whole other thing.

Google’s introduction of GMail made sense to me.  At it’s core, it’s related to search.  They didn’t necessarily pioneer anything revolutionary — web based email (and free at that) had existed for nearly 10 years before.  Witness Hotmail.    But they added AJAX-y goodness, made storage virtually unlimited, and then integrated their Google Search magic to make searching, sorting and finding stuff in your massive inbox very fast, easy and intuitive.  And that made sense.   Creating cell phone hardware?  Not so much.

Before all the Android fans start harping on me, I must note parenthetically that I “got” the concept of Android as a Google project.  It’s Google’s attempt to extend its brand to mobile platforms and lock itself in as the provider of choice for search on mobile platforms.  I get that.  (And by the way — it’s not like Google “created” Android from the ground up in quite the way neophytes might think.  It’s an open source, Linux-based OS that they polished and retrofitted to a mobile OS, much like making a new, customized Linux distribution).  But the leap to hardware and online stores, etc. is a whole other thing.

So on the one hand, Google has pioneered some newer technologies, brought awareness and popularity to certain methodologies (eg. AJAX), and has raised the bar for the rest of the tech industry.  It’s not necessarily a bad thing that a massively profitable, multi-billion dollar corporation is willing to throw money at R&D just to “see what happens”, with results going to the benefit of the likes of you and me.  [Click here to see a longer laundry list of their "Google Labs" products and technologies.]

However, from a business perspective, I can’t help but feel that Google should be sticking to its core competency (i.e. Search), then radiate out from there.  All of these wild ventures into completely new and unrelated territories is a bit scattered.  Up until now, Google was able to manage its reputation pretty well and these side projects were more like individual employee’s little pet projects and R&D stuff, and released into the wild for the rest of us to toy with and experiment.    But in the past year or two Google has really gotten behind some of these projects in a huge, huge way and trumpeted them as the next coming.   And they’ve taken quite a few hits.   While they are the 800lb Gorilla in search, they’re starting to loose credibility with their new ventures.

I haven’t even mentioned their “Project 10^100″ that they launched a few YEARS ago, in 2008.  Winners were supposed to be announced in 2009.  Then January 2010.  It’s now August of 2010 and they’re still soliciting proposals, have removed all deadline promises, and have simply listed future announcements as “coming soon.”   Another big PR hype that slowly rotted on the vine and died.

I’m not here to be a naysayer or beat up on Google.  I use Google.  I love Google.  I use Google Analytics for many of the web sites we design and develop for our customers at 401 Consulting, LLC.  I hope Google does well and is around for a very, very long time.  I’m just stepping back, as a business owner and tech industry CEO, and musing on the concept of sticking to one’s core competency.   I think it might do Google some good.


There are three types of people in the world:
those who can count, and those who can’t.

This old joke came to mind when I started thinking about this post. It seems there are two main camps of computer users:  those who’ve never heard of Skype, and those who know about it and think of it as a cutesy personal voice-over-internet voice/video calling program.  But Skype is starting to be seen as a valuable business productivity tool.  Allow me to explain.

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