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  • Another Chapter in the Microsoft Death Watch

    December 1st, 2008

    At once time, Microsoft could accurately boast of owning 95% of the personal computer desktops in the world. Clearly they would have preferred 100%, but nothing would stop Apple from working hard to make its presence felt.

    As Apple continues to grow faster than most skeptical analysts expect, the dominance of Windows has begun to erode, in the same way Internet Explorer’s lead has dropped. According to a survey of Web visitors from Net Applications for November, based on visits to some 40,000 sites, Microsoft’s share of the pie has dipped below 90%, amounting to 89.62%.

    The Mac gets 8.87% and Linux a mere 0.83%. So much for claims about the possible success of Linux as a regular desktop operating system, although it continues to have a great presence in the server segment.

    As far as browsers are concerned, Microsoft gets 69.77%, Firefox 20.78% and Safari picks up the third position at 7.13%. Although it has perhaps the most advanced feature set of any browser, Opera only captures 0.71% of the market, behind Google’s Chrome, at 0.83%. Chrome, as you might recall, uses Apple’s WebKit as its rendering engine but is not, so far, available for the Mac OS.

    Now I realize that just measuring Web visitors may not be sufficient to really gauge the actual operating system share, although certainly it’s an intriguing bellwether. That, along with ongoing reports that the Mac may be the only success story as far as computer sales are concerned this holiday season, clearly shows that Microsoft has to do a lot of rethinking about its marketing strategy.

    But there’s more.

    According to a published report this week, many customers, particularly businesses, are buying used PCs, so they can stick with Windows XP, rather than cope with the bloat and incompatibilities of Window Vista. That strange happenstance ought to serve as a huge wake up call. But clearly Microsoft has other priorities these days.

    For example, there are those renewed rumors that Microsoft is working hard to craft some sort of new agreement to acquire Yahoo’s search engine.

    Now I suppose this is a good time for these two companies to come together. Yahoo CEO Jerry Yang is looking for the exit door as soon as his replacement can be named. As with the rest of the stock market, Yahoo’s price is in the toilet, in the wake of the failure to work out an arrangement over search ads with Google. Of course, possible anti-competitive issues came to the fore there.

    So with Yahoo clearly on the road to nowhere, and Microsoft’s search business traveling exactly the same route, it may seem an ideal time for a deal to be concluded.

    But just what would this mean for the search business? Would a forced marriage of two failures somehow result in a magical transition to success? What about the illusion of possible synergies between the two companies.

    Also, knowing that Microsoft had captured Yahoo’s search business is not going to please the people who have already rejected Microsoft Live. Why would they suddenly turn around if Google’s two main competitors became one? More to the point, how many Yahoo employees would seriously consider leaving a sinking ship in the wake of such a misbegotten deal?

    Well I suppose with the U.S. officially in a recession, it may be harder for disgruntled Yahoo workers to find new jobs, so they may simply stay put to put food on the table. But that would hardly inspire loyalty and the desire to work closely with Microsoft to build a search system that becomes a credible alternative to Google.

    Meantime, it certainly won’t take a long time for Apple’s market share to break the magic double-digit barrier, perhaps as soon as the next Net Applications survey. But when and if Microsoft’s dominance falls below 85% and 80%, will the world’s largest software company begin to comprehend the change of their fortunes and realize they need to act and act quickly?

    More to the point, does fiery CEO Steve Ballmer know what’s really going on and what he has to do in order to fix the company? Is he prepared to shake up the management team and hire people who can change direction before the company is overwhelmed by more and more inertia?

    Or maybe he’s still waiting for the Zune music player to take off.

    Indeed, maybe Bill Gates had the right idea to exit his full-time job at Microsoft and concentrate on philanthropy.

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