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After watching the rise of YouTube, Microsoft launched its own Soapbox video site. After seeing Craigslist pull in huge amounts of traffic, the Redmond company launched its own online classifieds, Windows Live Expo.
And now, with social networks grabbing the attention of the online world, Microsoft is doing something extraordinary: It’s not really competing at all.
Rather than developing a direct rival to Twitter, Facebook, or LinkedIn, Microsoft is working with those services to incorporate their features into its own products.
Analysts say the company’s newfound pragmatism reflects the struggles of such services as Windows Live Expo and Soapbox—both of which have since been abandoned—and its focus on challenging Google in the search market.
But it also reflects a growing sentiment in the tech industry that the big social networks have achieved a critical mass that makes them practically untouchable. That affects the strategies not just of Microsoft Corp., but also of technology giant Amazon.com and countless tech startups.
Tech financiers in 2010 should avoid giving money to “anyone trying to build his own social network,” said Glenn Kelman, the CEO of Seattle-based online real estate company Redfin, during a recent Washington Technology Association panel looking ahead to the coming year. “I think you should use the existing networks that are out there.”
Microsoft offers some social-networking features as part of its Windows Live service, but it has been working openly with all three of the major outside services—Twitter, Facebook, and LinkedIn—rather than competing directly against them.
The company on November 18 announced plans for a new feature in Outlook that will let social-networking sites incorporate features from their services into the widely used email program. Business-oriented social network LinkedIn said it would be the first outside service to take advantage of the feature, letting people follow and send messages to their LinkedIn contacts through the Outlook interface.
A new overhaul of Microsoft’s MSN.com portal will let users incorporate their personalized Facebook and Twitter feeds into the MSN homepage. In October, Microsoft reached deals to incorporate data from Facebook and Twitter into results from its Bing search engine. Microsoft also has a minority ownership stake in Facebook and an advertising partnership with the site.
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