Yahoo + Microsoft = Web Mail Dominance + SaaS Synergy + Finally Social Networking On A New Order
Posted by Bob Warfield on March 20, 2008
Jeremy Zawodny writes that Yahoo + Microsoft = Web Mail Dominance based on this market share graphic:
As you can see, and as Dave McClure wrote in his 500Hats blog, adding these two together results in total dominance for web mail.
True enough, but there is even more going on around this pairing. Microsoft has chosen to make Exchange and Sharepoint the initial centerpieces for its SaaS/Cloud Computing initiative. Yet web mail makes for a painfully exposed flank that could be attacked. Picking up Yahoo effectively eliminates that flank. In fact, they’ll be able to seamlessly plumb all these disparate mail systems together in interesting ways if they think about it for a bit. This will be tantamount to the same kind of market share and dominance Google has over search, but instead it will be e-mail. That’s certainly not as ideal as Search, but it is interesting.
After using Xobni for a while, I am one of those who believes e-mail can be revitalized by injecting some social networking features into it. Microsoft, BTW, is rumored to be closing in on a Xobni acquisition as well. In fact, I wrote that one of the 10 things LinkedIn ought to do is to either acquire or build Xobni’s functionality. Picture what it could mean if Microsoft has this much control over e-mail, gets Xobni, and ties it all together with Social Network-like capabilities.
As a matter of fact, let’s even go a step further. Yahoo also has a huge portal presence. Today, products like FriendFeed and it’s ilk are popular destination aggregators. They save you running around to all those services. But, I’ve also written that companies need to be careful hooking up to things like FriendFeed and publishing apis that facilitate disintermediating themselves. Pretty soon they can become a feature of someone else’s product. In that same article I suggested:
And what about the aggregators? Why let someone new like FriendFeed even get a foothold? Let’s take the grungiest, oldest, most out of date aggregator on the planet, and ask what we’d do if we were driving the bus. I’m referring to Microsoft Outlook, of course. It can sort of do RSS feeds already. I would do a total facelift on the thing and kick it up a notch. Make Outlook the be all and end all aggregator. Make it do Twitter, blogs, and every other conceivable thing. And while we’re at it, let’s make it do these things well. Let’s Silverlight enable it. Wouldn’t that be a kick in the head from Microsoft? Isn’t just the thought of it a cautionary tale for how this can wind up? As everyone becomes a service, we lower the friction. As so often happens, and as is so counterintuitive, lowering friction here will reduce diversity of aggregators. There’s just not enough differentiation to sustain a lot of players, so the Microsofts and Googles can win. Maybe this is the value of Yahoo to Microsoft. It can be the destination site for everyone else whom Microsoft can regard merely as a web service.
The strategic possibilities for Microsoft are fascinating. The question is whether they see them clearly and whether they can execute on them. What I can tell you is this kind of competitive strategy is exactly what they’ve always been good at.
Woot! The game is afoot! Keep an eye on these Redmond guys…