Recently Microsoft took a $6.2 billion dollar charge-off because of failed Internet advertising it had sought over the past five years. Most of the charge-off is associated with the purchase of the company aQuantive in 2007. Many analysts treated this as a one-time non-cash “accounting” event at a company with $58 billion in cash on hand, operating cash flow of $29 billion and a stock market value of $257 billion.
I don't treat this as a minor unforeseeable mistake.
Had anyone at Microsoft asked me about the issue of creating, Bing as a competitor to the Google search engine, to use for advertising revenue, I would have told them not to waste their time. As co-author of Marketing Without Advertising, one of the three most successful marketing books in English, I would have told them what to expect.
Google search has more than two thirds of the search market and related advertising revenue. The public is very satisfied with Google.
I call this a service monopoly. A service monopoly is a business that satisfies a large percentage of the available market niche and consequently is not amenable to competition.
Put simply, if people are satisfied and find that the information or services they need are nearly 100% available on the service they are using, they have no need to change. And they will not change.
That is the definition of Google as a service monopoly.
Change occurs when the service monopoly does not fully satisfy the market niche. The new entrant can then take advantage if they provide everything that the service monopoly provides plus the additional needed customer functions.
Microsoft with Bing never satisfied whatever shortcomings Google may have had, if it had any.