Microsoft Corporation is a public MNC headquartered in Redmond, Washington, USA that develops, manufactures, licenses, and supports a wide

range of products and services predominantly related to computing through its various product divisions. Initially, Microsoft entered into the online search industry because of other ventures, but soon realized the importance of the internet and increased focus towards this area. The financial performance of Microsoft has been very strong as it closed the fiscal year 2008 with cash and short-term investments of nearly $24 billion, revenue of $60 billion and operating cash flow of almost $22 billion. Some of the other strengths are that Microsoft has a very strong brand image and lays great emphasis on research and development. Despite its strong position in most of its product lines, Microsoft was struggling to capture the market in the search industry. Microsofts search market share was mainly due to passive searches and was heavily dependent upon traffic to the MSN portal, which faced a decline as a result of the increased advertising clutter. This was the primary reason for the decreased market share of Microsoft search.

Strategic Issues:
Microsoft's search engine had a low market share compared with its competitors. Aldo, cut throat competition and easy replication of innovations is hurting the revenues from online services. Microsoft needs to enhance the companys search offerings, thereby increasing the value of its search offering through greater scale in search queries and gain a more competitive position in the search and advertising marketplace. In addition to reaching the benchmark set by Google, it is also important for Microsoft to develop points of difference by means of superior technology for search and searchbased advertising. Some of the important objectives that need to be addressed in the strategy include: To develop a robust search algorithm to sustain its competitive advantage and increase its market share by adopting to changing technologies To garner a larger market share and to be the No. 1 leader overtaking Google and Yahoo To enhance the revenue generation models through Search related advertising model To provide enhanced User Experience keeping in mind the ecosystem of the industry

Recommended Strategy and the Justification:

There are a number of options available to Microsoft in order to attain their objectives. Some of these include: To enter into an search alliance agreement with Yahoo/Other competitor for symbiotic model. The companys focus on cloud computing services will enhance its revenue and market share in coming years To completely revamp the Live branded search engine and position it as an independent and completely new search engine by focusing on relevance criterion & revenue generation model Based on careful consideration and a thorough analysis, we feel that the best alternative at this point in time would be to enter into an search alliance agreement with Yahoo. The search industry is a fast-growing industry and considering the strong position held by Google in the online search industry market, the alliance with Yahoo will help Microsoft speed up their progress in the industry.

In addition to this, there are several other benefits of this alternative including: The deal implementation involves transition of Yahoo!s algorithmic and paid search platforms to Microsoft, with Yahoo! becoming the relationship sales force for both companies premium search advertisers globally. Key features of the deal include Yahoo! and Microsoft search inventory will be integrated to form a larger search marketplace for advertisers Microsoft's technology platforms will be leveraged for both paid and organic search results, with the adCenter platform becoming the only advertiser interface. This transaction will allow Microsoft to increase the value of its search offering through greater scale in search queries and an expanded and more competitive search and advertising marketplace.

Plan of action for implementation:

Milestones:
ActionItem F orm anim ing plem entationteamfordecidingtheoperating strateg andcost benefitanalysisof thejointdeal with Y y ahoo..! S tudyingthecostbenefitanalysisandchalkingoutof the busines propos s al T level m op anag entdiscussionforneg em otiatingandfinalising thedeal Developm of thenewsearcheng ent ine/T weakingtheexisting m odel withcom binedfeaturesof Y ahoo andMS live N F inalisingof thebrandpositioningandg lobal layoutwithhug e m arketingsupport F R outandP inal oll erform ancetracking Duration 2 Months

3 Months 1 Month 4-6 Months

2 Months 15th Month Onwards

Resources Required: The resources that will be required for the effective implementation of the plan are as follows: Exclusive team for the development of strategy and revenue generation model High expertise technological team for tweaking/ reverse engineering the existing search algorithm and producing highly relevant search Negotiation team for closing the deal with Yahoo.! Aggressive marketing team for new global rollout and branding Financial team for doing Cost Benefit analysis Customer service team for performance monitoring and support services Exclusive Advertiser support team for renewed focus on Ad related support and maintenance Check-in with Decision Makers: Customer data base tracking for studying user behavior. Costing study for checking financials. Risk assessment study for validating the model Once completed, the new cross functional team will propose the findings with the top management with the final Business Model.

Clarifying Accountability and Responsibility:

P erson/ D epartm ent

S atyaNadella(H ead-Microsoft S earchE fforts) C rossF unctional T eam Mark Analysis&S et trateg T y eam F inanceT eam B usinessDevelopm team ent P roductD evelopm T ent eam Mark etingT eam Maintena andS nce upport E ternal R x elations

R esponsiblefor
Decision Making Studying various business models Customer analysis and Market need study Cost Benefit Analysis Business proposal development and Pitch efforts Revampingsearch algorithm&Tweaking Branding and Roll Out Customer Support Advertiser relations & Legal affairs

Expected Results:
The impact of the aforementioned plan will have several positive impacts that will be in line with Microsofts objectives. The expected results are as follows: Improved Visibility in Search segment with new and customer friendly features Increased Market Share across the globe Higher revenues from the search segment (in ad segment) to compete with Google Reduced search times better than competition Further, to ensure the effective implementation of the plan, we will Set up a separate Performance monitoring team for studying effectiveness Put in place an Advertiser relation team for studying revenue incremental benefit analysis Focus on customer analysis and feedback for continuous improvement Provide customers with weekly updates and maintain an active presence in web forums for debugging customer issues Hold weekly review meetings with top management