Concept of a Platform for Technological Products

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Services Strategy Update April 2008
Services Strategy Over the past decade our lives, our businesses, and our society have been transformed by the web.
In its early days the web grew through the explosion of information portals as gateways to content, marketplaces for commerce, and communications tools such as email, IM and newsgroups that drove a sense of community on the internet. Over time, the significance of these "3 Cs" - content, commerce, and community - has expanded tremendously, growing in ways through which they've become intermixed and mutually reinforcing.
Content has changed at both the "head" and the "tail". The line between editorialized portals and blogs has blurred, and all are consumed through feeds. Beyond news, movies and music and television have all expanded to embrace the web. And the interrelation of content and community has created a world of "social media", where both head and tail content is intrinsically social by virtue of community linking, tagging, and ranking. Relationships and collective behavioral intelligence have changed how we stay informed, find and share media, and interact with one another.
Commerce on the web has moved well beyond the early online shopping cart. Nowadays, community is impacting commerce in dramatic ways. Head retailers such as Amazon utilize community extensively for recommendations, reviews, and wish lists. Tail commerce websites such as Craigslist utilize community extensively for conversation around local products. And Search has completely transformed online commerce. It's an essential utility for how we research, how we shop, and how we buy on the web. It‟s also become an essential mechanism for how we market on the web, and increasingly for how we sell on the web. Community on the web once meant "group communications", largely through rudimentary tools such as email, IM and IRC, message boards and newsgroups. Today, the action has shifted toward using composite communications tools and platforms that mash together content, applications and commerce, all within the context of group interaction. These social platforms are altering the way we connect and coordinate, establish identity and affinities, and build reputation. While this notion of composite communications is most prominently demonstrated in how we use profile-centric consumer social networking tools, such as Facebook, the social platform is also finding its way into the workplace in the form of increasingly rich workspaces, both real-time and asynchronous, that integrate communications and content relevant to a project or a team.
As the "3 Cs" have evolved, so has the significance of online advertising as the economic engine powering our world of services. With growth projected from $40B today to $80B in the next three years, online advertising will continue to be the primary monetization mechanism for consumer services on the web. As advertising transitions more and more to being digital, measurable, and competitively bid, the "ad platform" is key. The advertising ecosystem surrounding this platform is reliant upon the continuous innovation of publishers and developers, whose interesting and engaging properties capture users‟ time and attention and ultimately serve to match advertisers with a relevant audience. Continuous innovation in such high-engagement products and services, in each area of the "3 Cs", will continue to provide the fuel to drive the advertising-based economic model. Given this context, it‟s strategic that we invest broadly in solutions and partnerships that advance our position in current and future generations of content, community, commerce, and search, and also in an advertising platform that‟s attractive to advertisers, publishers and developers.
But while innovation in the "3 Cs", search and ads is essential for success in services targeting consumers on the web, their impact barely scratches the surface of the much broader effect that internet services innovation will have on individuals, businesses, and developers.
Indeed Microsoft‟s overall services strategy encompasses all of these areas: services for the individual, services for business, and services for developers. The intent of this memo is to map out that all-up strategy. I‟ll outline three principles that guide our work, and describe how those principles are woven into our myriad software and services offerings.
Central to this strategy is our embrace of both a world of the ...