John Battelle has a post entitled Please, Give me LiveSoft (Or...Please Split Up Microsoft!) where he writes

Everyone knows that Microsoft has one center of gravity that matters: The Office and Windows revenue line. Everything else pales in comparison. But where does Microsoft get judged, day in and day out? Not on Office, or even Windows. It's search, and innovation across the web generally. And there, it's clear, Microsoft's gravitational mass is getting in the way.
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Microsoft is a middle aged company struggling to figure out how to dance with the teenagers, and its body simply can't keep up with its intentions, no matter how correct they may be. I'm not claiming "Microsoft doesn't get it" - in fact, I very much think it does. I'm saying that structurally, the company is not capable of executing on what it knows it must do. Major projects like Live, Search, and MSN need to compete in the same market ecosystem as Google, Yahoo, and the startups. As it stands now, they can't.

But that could be addressed. MSFT has already taken the first step, which is to reorganize into three distinct businesses - Platform and Products (Windows and MSN), Business (Software), and Entertainment/Devices (Xbox etc.). But really, what it needs to do is spin out a Google/Yahoo killer. Take Search, Live, and a good chunk of MSR (research) and make it a separately traded division of MSFT. Take the damn thing public. Imagine that IPO!

Let's call this new company LiveSoft.

When I first joined MSN I used to think the same thing, that Microsoft should spin off MSN instead of making us pay the various strategy taxes that comes with being part of the B0rg cube. However over time I've realized that this is never going to happen for two reasons.

The first reason I believe Microsoft would never spin off MSN (or Live or whatever we are calling it this week) is that the writing is on the wall that the era of desktop software is coming to an end. I suspect that the folks driving our technical direction like Ray Ozzie and Bill Gates have already accepted this which is why almost everytime see them giving speeches on our future direction you hear the magic buzzword services.

The second reason I believe Microsoft would never spin of MSN is revenue growth. If you look at all the various businesses Microsoft is in, the one with the highest growth potential is online advertising not video game consoles, mobile phone operating systems or any of our other "emerging businesses". From a dollars and cents perspective, it makes no sense for Microsoft to give up it largest growth business.

It is a nice dream though.


 

Monday, March 20, 2006 8:07:40 AM (GMT Standard Time, UTC+00:00)
Yes break it up... but perhaps instead of a vertical split, do a split across the middle. Everyone who has been in the same level for more then 3 years goes bye bye.
G
Monday, March 20, 2006 10:48:39 AM (GMT Standard Time, UTC+00:00)

"The first reason I believe Microsoft would never spin off MSN (or Live or whatever we are calling it this week) is that the writing is on the wall that the era of desktop software is coming to an end."

That's FUD. Plain and simple.
Stephane Rodriguez
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