Ballmer Intent on Throwing Good Money After Bad

I have said it before and I’ll say it now: Microsoft does not have the market mandate to aggressively pursue and capture consumer markets. In most cases, consumers only buy Microsoft products and services when they have no other choice.

Zune has been a nearly unmitigated failure, Xbox and Xbox 360 have been qualified failures, and Microsoft’s Internet services, with the exception of Microsoft Messenger, have been perennial also-rans.

Admittedly, consumers — most of whom also have jobs (except the the kids, of course) — also use Windows and Office, but those can hardly be defined as consumer offerings. For the most part, people have used Office not because they have any special fondness for it but because their work necessitated its adoption. All that might be changing, but that’s for another post at a later date.

In a textbook instance of throwing good money after bad, Microsoft profligately expends resources in pursuit of a consumer market it can never own, at least not a degree that would justify the overall investment.

At Microsoft’s annual meeting with analysts, as covered by the Wall Street Journal, the company’s CEO Steve Ballmer signaled that Microsoft will continue to fight the trend, irrespective of past performance and current capabilities.

From the Wall Street Journal coverage:

Investing in search is important, he said, because it is a foundation for creating other consumer Internet services.

“Search is one of the starting points on the Internet,” Mr. Ballmer said. “It’s the best place to distribute new Internet services to the consumer.”

What Ballmer says is true — search is a foundation for the distribution of new web services to consumers — but the consumer, generally speaking, has shown little inclination to patronize such services when they carry Microsoft’s brand. Ballmer, as is his wont, blithely ignores this reality, much as a captain of a doomed frigate might ignore an iceberg in his path.

I’m not saying Microsoft can’t be a player in web services. In the enterprise, where it has, after much trial and tribulation, finally developed products that put it on a favorable competitive footing against Linux and Unix, Microsoft has an excellent opportunity to prosper from web services.

I just don’t buy Microsoft as a consumer juggernaut. That train has left the station a long time ago. Ballmer missed it. Somebody at Microsoft should advise him to play to the company’s strengths rather than to its weaknesses.

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