Tuesday, December 05, 2006

Microsoft's American Idol

Businessweek's What Entrepreneurs need to know is a decent synopsis covering first, Microsoft's push for the small business market with its Ultimate Challenge, described in the businessweek article as a
nationwide small-business plan contest that's part marketing push, part business-idea roundup, and part American Idol.

Interesting description... it sounds more to me like a Microsoftian (read: Embrace, Extend, and Extinguish") attack on the recent trend in Venture Capitalism from companies. While at least one prominent tech company has managed to deal with the evolving Venture Capitalism climate in an Interesting way, most of the other high-flying tech companies are using the customary strategy of wait, then devour in a hugely expensive manner.

While this decision by Microsoft might be described by Businessweek as nothing more than a marketing scam with the potential to pick up business ideas and get the american audience off their couches for something business related, I think it's a clever way to take advantage of the Web 2.0 trend toward user-generated content.

For a business to get onto a web 2.0 news portal, say, Digg, it has a much better chance if it's cited by a fairly reputable source. But most small companies in the modern investment climate are simply getting lost in the static of all the new startups. If Microsoft uses its ability to make news with every sentence of press release to give these startups the initial eyeballs for the seed money they need to come from Google, they can take advantage of their ability to simply make news to a) fund a new startup with what can be a surprising amount of money, b) develop a good relationship with a new company which has decent funding already and improve their contactability by , c) market their new office suite's ability to work within a small business and d) increase the popularity of their own website as a new web 2.0 news portal.

In other words, this could be one of the opening salvos of Microsoft's new plan to take over the internets. It satisfies their yearning to seem cool, their desire to profit from web 2.0 (not die from it), and does it all without seeming like anything but marketing fluff or spending a lot of money.

A clever innovation on Microsoft's part.

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