Can Microsoft Outflank Apple, Facebook, and Google? A Strategy Update

I left Seattle just over a month ago, and people keep asking if I miss anything about it. Yes, I say. But it’s not the amazing coffee, the great food, the nice people, or the beautiful scenery. I miss Microsoft.

I’m only half-kidding. I don’t miss hearing about Steve Ballmer’s iPhone and every turn of the Microsoft product screw on a daily, up-close basis. And Microsoft serves as a punching bag (or a crutch) for the media and business community way too often for my tastes. But a tech community needs a giant like that to anchor it, and keep it grounded. wouldn’t be in Seattle if not for Microsoft’s talent pool. RealNetworks wouldn’t be there either. Every other techie you meet in Seattle has a Microsoft connection.

Nothing like that exists in Boston. There’s a community around IBM and a bunch of hardware and data storage companies. There’s an entrepreneurial network around MIT, Harvard, Boston University, Northeastern, and many other schools in the area. There are big companies like EMC, Nuance, and Raytheon. But there isn’t one overarching technology presence.

And yet, on a national scale, Redmond, WA-based Microsoft (NASDAQ: MSFT) has been quiet lately. Too quiet. All the noise in the tech industry is being made by the likes of Facebook, Google, Apple, and even IBM these days. Under the surface, though, big things are happening across the cities in Xconomy’s network. We might even look back at 2010 and say it was the turning point for Microsoft’s new businesses.

Here are a few dots to connect:

—Microsoft’s big Web search project known as Bing is just over a year old. Doesn’t it feel like longer than that? Credit Microsoft’s marketing efforts for getting the word out about this, the most dangerous competitor to Google’s core business. Bing has slowly but steadily gained market share in search—up to 12.6 percent this summer, while Google has 65.8 percent (according to comScore). Just yesterday, Bing announced it is officially powering all of Yahoo’s search capabilities in the U.S. and Canada. Next up: integrating Yahoo with Microsoft’s search advertising platform, and trying to make some real money.

—Other than Bing, Microsoft’s best chance to capture the online consumer crowd … Next Page »

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