“Obi-Wan: The FORCE can have a strong influence on the weak-minded…”

Replace “Force” with “Money” and this sums up Microsoft’s problems. Its not talent, not creativity, not assets, not brand… Just money. Not because money doesn’t enable you to achieve things but because it blinds you of the talent, creativity and assets that exists within.

I read with interest several blogs / articles (1, 2, 3) that rationalized the pros and cons of a possible Yahoo-Microsoft take-over / merger / strategic partnership. Most of them, of course, vote against or think a partnership first makes the best sense.

Personally I say “Forget Yahoo” - Microsoft’s only way out is Microsoft itself!

But not today’s Microsoft. Tomorrow’s. I believe Microsoft can reinvent itself (OK - Vista isn’t a good start) and become a leader in personal and enterprise digital services.

So with a gross cash reserve of $50bn, why not go on a little shopping spree? Why? Because all that is bad in Microsoft, I believe, starts with that. Father Bill and Co-Father Steve should tell their kids the allowance this year just got cut and they better get creative if they want to stay at home.

The big conglomerate needs to do something TOTALLY different. Something COLOSSAL to break the status quo, something that can bring REAL change and not incremental.

Like what? Like become an umbrella to 10,000 start-ups. All using Live, X-Box, MSN etc. as platforms - INSTEAD of letting these platforms becoming THE company. Convergence has cleared the borders between enterprise and consumer applications, mobile and PC, desktop and online. The old fashioned corporate divisions will not be able to sustain progress, spur innovation.

Create robust R&D centers at the core of the corporate, encircle them with brandless, nameless platforms / services (currently Live, MSN, etc.) and let new mini, independent COMPANIES (not business-units) run new products / services on them. Don’t tie them down ‘Microsoft inside’ only policy - create a loose but synergistic relationship that will benefit both sides.

Let natural selection take its effect and like a mega VC select which companies you keep funding, which you cut off, spin off and or continue to nurture. Drop what become legacy structures and regroup to smaller, fitter units. This eco-system is much more likely to create a rival to Google [in its respective field] than Microsoft in its current form. In fact, this way there is no Microsoft that can be ‘attacked’ face on.

The “loose form” corporation will be a much more formidable (yet friendly) adversary then one giant gorilla. With no anti-trust issues to carry like a hump on its back.

The biggest difference between Google and Microsoft at this point is that Google needs to take-over / merge to grow and Microsoft needs to dismantle. This is why merging with Yahoo is a mistake. Its the opposite of what Microsoft needs to focus on.

Reminds me of the famous “Opposite George” episode in Seinfeld when George comes to the realization that in order to succeed in life he need to do the opposite of what he always thought was right “I’ll tell you this, something is happening in my life! I did this opposite thing last night. Up was down! Black was white! Good was… bad [Seinfeld]… day was night [Elaine]”.

Dwelling into the micro analysis of a Microsoft-Yahoo ’something’ is NOT what needs to be discussed. How Microsoft finds its FORCE back WITHIN - is.

      

CTIA fueled some significant mobile news this week as Google, Nokia and Yahoo are about to crash helmets over the next mobile killer app.

Google has made a couple of significant steps this week. The more significant announcement came on Monday, as a strategic deal with LG was announced. Mike Evant reports that Google and LG will preinstall Google Maps, Gmail and Blogger on a wide variety of LG phones, making it a no brainer for carriers to ship and for users to try.

In addition, YouTube will be launching a mobile site as soon as the exclusivity period with Verizon Wireless expires. Unlike the Verizon version which is client based, the mobile YouTube will be WAP based. It will be interesting to see how YouTube deals with video streaming issues across different carriers, networks and devices. All in all a “two punch strategy”, Google for text and YouTube for video, could end up being very effective.

Nokia has not kept quiet. Unwired view is telling us about Nokia’s patent bound semantic visual search engine, screen shots and further explanation of the search process is provided. Katie Fehrenbacher speculates about the natural synergy with Nokia’s camera phones and if half the rumors are true, Google will soon have to go back to protecting home turf, at least when it comes to search innovation.

Yahoo has not kept silent and may very well be making the most concrete steps to date. The introduction of Mobile OneSearch is a promising mass market step, taking search to every internet enabled phone. Yahoo already offers Yahoo Go, the full blown Yahoo experience, to the high end, and together with OneSearch a comprehensive strategy seems to be forming. 

These seemingly little steps are very significant for a number of reasons. Such proactive steps by handset manufacturers and web titans take the carriers further out of the “next killer app” equation. In addition, these provide indication that search, rich content discovery and messaging are the areas where the leading players look for the next killer app. Search has never been carrier territory and carriers have struggled with putting together winning propositions around content. On the other hand carriers do make a lot of money from content and tons of money from messaging. The battle over who owns what asset is definitely not over, but this time, I believe, the space is mature enough to focus on the criteria for splitting the larger pie rather than fighting over who gets to burn it.