Any Innovation in the ISP Wars?

You’ve heard it a million times. In fact, it might be the word that Bill Gates and Steve Ballmer say most often in public. The word, of course, is “innovation.”

Innovation is what gave Microsoft its absolute dominance in the operating system market, the company has said over and over in defending their company against antitrust claims. Innovation helped the Internet Explorer browser send Netscape running into the arms of America Online (AOL).

Until now, I bought that argument. The innovation was there. As for the rest, I thought that the whiners on the other side mistook hard-nosed business practices for bullying.

With the updated Microsoft Network (MSN), Microsoft plans to do to the online service and portal market what it did to software. But even if you can forgive Microsoft’s aggressive marketing strategies, all the innovation I’m seeing now smells a lot more like imitation.

Monkey See, Monkey Do

Maybe there’s more to come. Maybe the “new” MSN had to be rushed out to counter AOL’s release of version 6.0.

But while neither upgrade is particularly earth-shattering, at least AOL can hype its voice-enabled services and the other Net gymnastics that users will be able to do once most of them get broadband connections.

On the other hand, the best that can be said for MSN’s upgrade is that it’s being backed up with $1 billion (US$) in marketing and advertising.

Aggressive Is OK

Microsoft is calling it a brand-building effort. But this sounds an awful lot like the kind of aggressive move that has made Microsoft a very unpopular kid on the playground.

Not that I’m against aggressive corporate moves — not at all. Especially not when the rewards to be won at the end of this race are substantial.

Membership fees, which for example have helped AOL grow steadily, are one piece of the pie. There’s also the lucrative business of capturing a share of all the e-commerce that goes on after a user walks through your portal. And don’t forget the advertising dollars that will be moving around depending upon whether the most eyes are on Yahoo!, AOL or MSN.

What’s New?

So there’s a market and a company that wants a bigger slice of it. Okay. But where’s the innovation that’s going to allow us to stomach Microsoft’s insatiable appetite?

Let’s see. There’s closer integration of instant messaging into the e-mail services. Oops — that looks a lot like the buddy system that AOL greets its users with and features in its TV ads.

And then there’s MSN Explorer, the new gateway through which MSN users access the Web. In other words, MSN Explorer is exactly the type of easy-to-use, all-in-one desktop environment that has made AOL the choice for beginning Internet users.

Manifest Destiny

Basically, Microsoft’s only innovation seems to be its decision to push MSN forward post haste, while there are international markets still up for grabs and before the vast majority of the U.S. population gets settled in with a broadband online provider.

Beyond that, one can’t help but wonder, if you’re not going to do the job better than someone else, why do it at all? It’s one thing to reinvent the wheel, but why duplicate it?

Because that’s what you’re supposed to do. If you’re Microsoft, that’s clearly what you can do, what you say you’ve done in the past — maybe even what you have to do. First make the wheel your wheel, then make your wheel everyone’s wheel.

Style Points

Even if that’s true, may I offer Microsoft a suggestion? No doubt, portals five years from now will be something altogether different from what we have now. Why not leapfrog ahead a few versions and, instead of tweaking and brightening, really give us something unique?

Microsoft can spend its marketing millions and build a brand all it wants, but without innovation, it isn’t going to win this race in style. So far, all it has done is paint racing stripes on the old minivan.

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