With its newly unveiled adCenter platform, Microsoft Corp. has entered the keyword-advertising market dominated by Google Inc. and Yahoo! Inc. Like those two companies, Microsoft will offer advertisers a targeting capability through the medium of paid search. It’s easy to understand the Microsoft counteroffensive. Google and Yahoo have built online advertising into hugely profitable businesses, while Microsoft has waited to get in on the action. Microsoft’s revenue is slowing from a software market mature with the company’s Windows and Office products, so the time is now right to make a strategic push into the steadily growing Internet-advertising market, expected to reach $26 billion in 2009, according to Forrester Research. For its part, Google has plans to sell web advertising that includes video as a first step to selling advertising on television, a business niche the company intends to enter in the near future. But the story here is not about sibling business rivalry, media convergence or the Internet’s growing role as a platform for marketing. It’s much bigger and more complex than that. The real story has to do with the dissolution of conventional industry boundaries, rampant commoditization, a saturated information environment and a conceptual gap in the way these strategic issues and business realities are being confronted.
Globalization has changed the strategic context for business. But globalization isn’t about opening offices in Beijing and Mumbai. At its core, globalization is about a new operating theory of the world based on connectedness between, across, above, below and through pre-existing political, social, economic, thematic, geographic and security boundaries. It is this connectedness, and its complexity, that is increasingly the source of heaving disorder engulfing nearly all industries (and nations). The connections and interactions can be so intense and transformative that we can no longer fruitfully distinguish between actors and their environments, let alone say much about any piece in isolation. Whereas previously it was possible to separate customer from competitor and to analyze the performance of individual pieces, advances in telecommunication have linked the information and economic domains of customer, competitor and collaborator as never before.
At the same time, the dynamics of information production, dissemination, storage, display and retrieval have changed radically, to the point where significant amounts of information are produced and obtained outside the control of any one organization.