Microsoft has announced its intentions to make “Do Not Track” a product default in the upcoming Internet Explorer. In case you haven’t been following the story, this means that companies abiding by “Do Not Track” will no longer gather user-specific data from Internet Explorer -- which holds roughly 37% of the US browser market -- unless users explicitly opt in to have their data reported. The marketing community is obviously less than thrilled at the prospect of so much online data going dark, and have strongly urged Microsoft to reconsider.
There’s been plenty of time for some great thinking to emerge on what this all means for Microsoft. So I’d like to take a step back and point out that this isn’t just a Microsoft story. It’s a story about the results of enterprise businesses jumping into the marketing industry -- and, down the line, facing tough choices between newly formed marketing practices and conflicting core businesses.
That’s essentially what’s at play in Microsoft’s move with Internet Explorer. Microsoft entered online media when, in the 1990s, it saw a coming convergence of software and media -- and so decided to stretch beyond its core software business to jump online. In other words: Microsoft’s media division has been a strategic offshoot, and not a part of the core business, from the get-go. And, having lost $2.6 billion in the last year alone, for a total loss of nearly $10 billion in the past decade, it’s clearly a strategic offshoot that hasn’t fared well.
Now comes the recent Do Not Track move. Many see the move as a way to cut Google’s data legs out from underneath it -- presumably to affect Google enough to ultimately hurt its software business (this is more likely a proxy struggle over software than a direct fight over advertising, as the move threatens Microsoft Advertising as much as, or more than, it threatens Google). Others see the move as a way for Microsoft to position itself as a privacy activist to curry favor with the consumer market -- which represents a large chunk of Microsoft software buyers. Either way, Microsoft has decided to support its core software business at the expense of its strategic offshoot in online media. And that move stands to leave behind a huge hole in the media data landscape.
This is a story we’ll see a lot of in the coming years. As data-driven media becomes more lucrative and the barriers to entry continue to drop, more enterprise companies -- from software businesses to big data companies to credit card operators -- are jumping into the fray. The sheer size of these companies means they’re making big splashes from the start, and spawning mini-ecosystems that rely on them for critical data right away. And inevitably, some of these businesses will face tough choices between the core businesses and the media offshoots. Just as inevitably, the core business will usually win. When that happens, those great new sources of data will transform quickly into huge gaps in the data landscape.
The upside is that the most nimble marketers can look forward to taking advantage of sudden new sources of data as more enterprise offshoot businesses spring up. The downside is that the marketing ecosystem faces a future of continually seeing essential sources of data disappear suddenly. Either way, we’re all facing a rollercoaster ride as the enterprise businesses march into the marketing space. Welcome to the new world of media information.