Microsoft's Strategy for Small Businesses (B): Marketing MS Office Live

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Case Details:

Case Code : MKTG168
Case Length : 18 Pages
Period : 2005-2007
Pub Date : 2007
Teaching Note :Not Available
Organization : Microsoft Corporation
Industry : Computers and Information Technology
Countries : Europe, USA

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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The Competitive Landscape

Web hosting was a very competitive market with hundreds of companies fighting it out for the small business market. For instance, Yahoo!'s Small Business hosting service cost US$12 per month ($9 for the initial three months) and included 200 business e-mail accounts, 200 GB of data transfer, and 5 GB of disk space. In December, 2006, Google started providing free web hosting for AdWords (Refer to Table III for competitive offerings of other Web hosting firms)...

An Innovative Ad Campaign

In December 2006, Microsoft aired Rich media ads using Rovion's InPerson technology to launch an online campaign to support the introduction of Office Live. The InPerson technology was the proprietary patent-pending technology of Rovion that supported airing borderless streaming video messages. The technology was similar to the "green screen" technology used in movies and television to show special effects. The technology embedded a transparent Flash window on the Web pages that resulted in the actor (who had been filmed against a blue screen) seeming to appear on top of the other contents of the webpage while addressing the visitor.

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The videos did not have any borders and appeared seamlessly on top of the other contents...


It seemed likely that Office Live would become a major revenue earner (through advertising and subscription fees) for Microsoft, if small businesses remained with Microsoft through their expansion period. Regarding Office Live's future strategy, Microsoft said that it would continue to maintain a customer-focused approach by focusing on ease of use and integrated experiences across all the products and services of Office Live. It would also "invest in creating additional sales and marketing services that small businesses demand, as well as support greater customization on the Office Live platform."...


Exhibit I: Microsoft's Logo
Exhibit II: Microsoft's Five-Year Financial Summary
Exhibit III: Five-Year Chart of Microsoft's Stock Price Movement on the New York Stock Exchange
Exhibit IV: Microsoft Office Live Logo
Exhibit V: Microsoft using Inperson Technology to Promote Office Live

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