Microsoft’s revenue growth is slowing down. This has many important implications, most of them on Wall Street. If Microsoft is perceived as slowing down chances are the stock price will drop. Microsoft is still a very healthy company, however Wall Street reacts more on perception than on fact. If Microsoft becomes boring in Wall Street’s eyes, they will react to perception before fact. So if you were leading Microsoft, what would you do?
Create a plan for a new and exciting line of products and services. Even if you have no idea what those products and services will become.
IBM has done this for decades. Could Microsoft now be trying to announce a product “future” before there is substance? Sure. Investors have been willing to overlook bad quarters or years at IBM if they believe a better future is coming. These memos are intended to start a public dialog that will take attention away from Microsoft’s business slowdown.
Mary Jo Foley: Microsoft Needs to Say No to Web 2.0
If Microsoft officials tout any of its pending MSN services as examples of Web 2.0 deliverables, I’ll take it as a sign that management has lost its way. There’s no doubt that Microsoft needs to find a way to continue to grow in a world where its top two brands, Windows and Office, already have cornered in excess of 90 percent market share in their respective categories. And extending these applications with services is a sensible way to do this.
But Microsoft doesn’t need to snap up a bunch of Web 2.0 startups, out-scour AJAX or invent the 38th signal to do this. The Redmond software maker just needs to stick to its knitting by developing new ventures that mesh with its established businesses. Microsoft needs to just keep saying no to Web 2.0, at least until Web 2.0 means something more than just “we want venture funding.”