Microsoft’s Google Envy (Part 396)

December 4, 2008, 7:14 pm

Microsoft’s Google Envy (Part 396)

By Saul Hansell

The choice of Qi Lu to run Microsoft’s online services division offers the clearest picture yet about Steven A. Ballmer’s vision for the company’s online effort. Its colors are blue, red, yellow and green and it is spelled G-O-O-G-L-E.

Qi Lu. (Credit: Microsoft)

Mr. Lu is not the sort of executive I might have expected Microsoft to pick. When thinking about Jerry Yang’s decision to step down as Yahoo’s chief executive, I wrote last month that the company needed less a business executive than an editor in chief. My point was that Yahoo would benefit from someone who can make sense of its sprawling set of services and create a coherent experience and brand for users.

My instinct was that much the same skill set would be useful at Microsoft. Its offerings have been jumbled between established brands like MSN and Hotmail and the newer Windows Live. And its marketing pitch of late has been about buying customers, through shopping rebates, rather than earning loyalty through services people understand and love.

Mr. Lu was the top search engineer at Yahoo and is credited with helping build a very credible search engine. But he hasn’t run a business or been a product manager. Why would Mr. Ballmer look at this scene and choose an engineer as the leader? It’s not like Microsoft doesn’t have engineering talent.

Here’s one explanation: Mr. Ballmer sees Microsoft’s No. 1 enemy as Google. Google’s No. 1 product is a search engine. So to beat Google at its own game, he may figure he needs the person who can make the best search engine possible. By that standard, Mr. Lu would be on anyone’s short list.

Mr. Ballmer may also have culture envy as well. Eric E. Schmidt, Google’s chief executive, runs the company as a giant experiment to see what would happen if engineers were put in charge. Many of the company’s rituals, such as the famed 20 percent time to work on personal projects, are meant to appeal to and glorify its programmers. That has occasionally led to some breakthrough products and a culture that consistently attracts some of the very best technical minds.

Of course, Yahoo’s culture is almost the opposite, with product managers in charge and engineers in a supporting role. That might argue against the theory that Mr. Lu’s appointment is meant to mimic Google. But it’s hard to predict what Mr. Lu would be like in a different setting. Microsoft, in fact, is somewhere in between. Historically, most divisions are run by two parallel teams, engineering and product management.

This logic leads me to infer Mr. Ballmer’s assignment to Mr. Lu:

1. Motivate Microsoft’s existing army of search engineers and hire some more top-notch programmers.
2. Build a search engine that will blow Google out of the water.
3. Invent other Web based services to create a reputation for innovation.
4. Figure out how to brand and market all these services.
5. Create an advertising platform that will win the hearts of marketers.
6. Do all this while enhancing, or certainly not undercutting, Microsoft’s existing Windows and Office businesses.

That’s a tall order for anyone. Mr. Ballmer’s bet appears to be what Microsoft needs most is a little more lava lamp juice in the water pipes in Redmond.