Whoever said August was a quiet month for news must not work in the digital industry. In the past two week, we’ve seen Microsoft sell Razorfish to Publicis, Facebook acquire Friendfeed, Microsoft and Yahoo announce a long awaited search deal and Google roll out it’s developer version of “Caffeine”. Now if Apple would just announce their new tablet computer the week would be complete!
Seriously, there’s already been a lot of online analysis about these respective announcements so there’s not much need to rehash that here. But I was struck by an overarching theme that ties all these projects together (and by the way, Microsoft’s recent announcement that they will be creating an online version of Office is a part of this too). In almost every case we’re seeing reactive rather than proactive strategy. Microsoft and Yahoo team up because they want to grab a piece of Google’s search business. The Razorfish deal includes a guaranteed ad buy that will help strengthen the MS-Yahoo partnership. Facebook wants FriendFeed so it can improve it’s real time search capabilities and compete with Twitter. And Google, rolls out caffeine to demonstrate that it’s not falling behind in search (i.e. keeping up with Twitter as well). It’s the digital version of keeping up with the Joneses and it all seems to be in service of a goal that no sane online consumer would ever want. A single digital space where a person can execute all their digital tasks (under a benign corporate umbrella, of course).
Does that goal even make business sense for the companies pursuing it? One could argue that this model has been tried and rejected by digital consumers already (AOL tried to be all things to all people and look where that got them). One could also argue that growing beyond a certain size can create a major obstacle to innovate practices within a corporate culture (most recently evidenced by the high level design departures at Google). But there’s one more reason to look at this as a poorly thought out business strategy. It distracts each of these organizations from their core competency.
For those of us outside the various corporate bubbles, this may be easier to see. For some of us it’s obvious that …
Microsoft users would rather have a stable build of Windows and better functionality in the Office suite than an MS search engine.
Google users want Google to continue to get better at providing relevant searches rather than worrying about Twitter (is there anyone who’s not a real tech head who is worried about Google being too slow?).
Facebook users want a place where they can interact socially with other users. Search is a lot less important to them than tools for enhancing those interactions.
In each case, the question has to be asked … are these companies focusing on their core competencies and the needs of their consumers? Can they deliver a significantly better new product than the existing one from their competitors? If the answer is no, then maybe they’re better off “sticking to their knitting” and delivering remarkable new products in the areas where they excel.
What’s your core company’s core competency? Are you leveraging it to full advantage to serve your customers’ needs?