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Analysis

Convergence Idea Gets Serious with Live Mesh, Analysts Say

By: Jabulani Leffall

4/29/2008

Redmond's Ozzie all but acknowledged the need for a new and improved revenue model in Thursday's Services Strategy Update memo. In it, he described Redmond's intention to compete for eyeballs and ad dollars through this new initiative.

"As the '3 Cs' have evolved, so has the significance of online advertising as the economic engine powering our world of services," Ozzie wrote. "With growth projected from $40 billion today to $80 billion in the next three years, online advertising will continue to be the primary monetization mechanism for consumer services on the web."

Ozzie added that the ad platform will be a key element in this evolution. Microsoft is currently in third place behind Google and Yahoo in terms of search popularity, and has been trying to acquire Yahoo over the last few months.

Rosoff said that Ozzie's new program outlined in the memo doesn't have a direct correlation with Redmond's Yahoo buyout measures. Instead, it's "a clear attempt to capture some of the online advertising market that's powering Google's rise, taking the battle to Google's turf before Google gets too much farther into Microsoft's turf with SaaS replacements for Microsoft software, such as Google Apps."

Whether it's old news or a new day, Microsoft has proclaimed the Web to be "the hub," which is powered by a "web catalyzed services transformation."

Live Mesh launched yesterday, and Ozzie proclaimed the "power of the internet, and the magic of software" across a world of devices. Now it will be intriguing to see how Web developers, channel partners, IT security pros, end users -- and most important, Microsoft's competitors -- respond.


Jabulani Leffall is an award-winning journalist whose work has appeared in the Financial Times of London, Investor's Business Daily, The Economist and CFO Magazine, among others. You can contact Jabulani at editor@entmag.com.