Microsoft Trims Product Line, Refocussing on Core Businesses?

We here at OSNews haven’t really been reporting on this, but if you’re following other tech websites, you will undoubtedly know that Microsoft has been axing a number of products and initiatives lately. It seems as if Microsoft is doing what many companies do in economically dire times: cut the cruft, and focus on your core aspects.

Over the past few months, Microsoft has axed a number of products that were either not working out for them as well as they’d hoped, or products that are considered legacy. For instance, Microsoft pulled the plug on its YouTube rival Soapbox, which turned out to be a waste of time. Also biting the dust are Microsoft Money Plus and Encarta, products that have been with Microsoft for over 15 years.

Another victim, announced today, is Razorfish, its digital marketing agency, which Microsoft has sold to the French advertising agency Publicis Groupe. Due to the deal with Yahoo!, Microsoft no longer has to manage the online advertising business, as this will be done by Yahoo! for both Microsoft and Yahoo!. Other victims include Popfly and PerformancePoint Server 2007.

“I think that highly strategically focused companies can use a downturn like this to reconsider what they’re doing, and decide what’s working and not working,” Charles King, an analyst with Pund-IT Research, told eWEEK in an interview, “At the end of the day, Steve Ballmer and other executives have been looking at strategic groups and asking, ‘How well is this working?’ And if it’s not working well, ‘How long will it take to get this working right?’ And if the time frame doesn’t work, ‘Let’s cut it now’.”

The idea seems to be to get Microsoft to focus on its core businesses, meaning Windows and Office. Both Windows 7 and Office 2010 are right around the corner, and with the economic downturn, this is as good a time as ever to cut some of the underperforming cruft and focus on what you’re traditionally good at (financially speaking, that is).

Microsoft’s upcoming retail stores seem to fit well into this picture, with the stores clearly being geared towards five things: Windows, Office, XBox 360, Bing, and Zune. Microsoft is a big company, and a few setbacks won’t be too much trouble for them. The company doesn’t have a knack for coming up with the next best thing instantly. It’s more like throwing darts at a dartboard while drunk and blindfolded; if you keep it up long enough, you’re bound to hit 180 eventually.


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