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News that Democratic media strategist, Mark Penn, is leaving his firm to work for Microsoft (MSFT) CEO, Steve Ballmer, made my head spin. Penn's mission is to fix Bing, the search engine that never seems to catch up with Google (GOOG).
So many questions come to mind:
- What would it take for Bing to gain enough market share to make a difference?
- Why does Penn think he can fix it?
- Why does Ballmer think Penn can fix it?
- Why would Penn leave his own firm(s) to take on such a thankless task?
My calls to Penn's office were returned and after his assistant asked me about what I was hoping to learn from talking to Penn, Penn declined to comment.
Mark Penn is a "political strategist, pollster and CEO of the Burson-Marsteller public-relations firm," according to Digits. He also is CEO of polling firm Penn Schoen Berland LLC. He advised Bill Clinton when he was president and his wife, when she ran for president in 2008.
As Penn told Digits, Ballmer and Penn became intrigued with each other about six months ago. That was when Penn conducted a review of Bing for Ballmer. Penn was intrigued by Bing's quality, he said, while Ballmer liked Penn's comparison of pitching Bing to consumers to selling a political candidate to voters.
Despite pouring "billions of dollars into technology and marketing for Bing [including Yahoo searches]," it has less than half Google's market share. Bing accounted for 25.6% of U.S Web searches in June 2012 to Google's 69% share, according to ComScore.
Bing will be the first of Penn's challenges as Microsoft's corporate vice president of strategic and special projects. He is assembling a "SWAT team to work on thorny strategy questions around Microsoft consumer projects."
It's a good thing that Penn will stay in Washington most of the time. That's because it strikes me that it would be a miracle if Bing actually gained market share as a result of anything that Penn did in his new role.
That's partially because of Penn's lack of search engine product development expertise and partially because of what happens to people who are put in charge of special projects at a huge company like Microsoft.
Let's first look at why Google is so far ahead of Microsoft. For that, what comes to mind is how masterfully Google has managed the people who are in charge of making improvements to its search engine.
Google gives all workers 20% of their time to devote to products or services that interest them. And as Intuit (INTU) Founder and Executive Chairman, Scott Cook, explained to me in February, this massive decentralization of innovation helps keep Google 60% ahead of competitor Yahoo in terms of online advertising effectiveness.
Google does this by showing its engineers how to code, test, and measure Google’s advertising technology. Within that framework, Google engineers are free to come up with their own ideas. This approach to innovation helped Google stay 60% ahead despite Yahoo’s Panama initiative—which involved 300 people over twenty months—to catch up.
By contrast, Penn is entering a Microsoft with a very different culture -- one that is driven by Stack Ranking, about which I wrote on July 13. Stack Ranking focuses product developers away from getting industry-leading products to market faster than the competition.
Instead, it directs them to prevent their peers from getting outstanding performance reviews and to brag about their accomplishments to each member of the management committee that determines their relative ranking.
Unless Penn -- who will likely not have line authority over the members of his SWAT team -- can persuade Ballmer to change the way people at Microsoft are measured and paid, he will not be able to overcome Microsoft's inbred competitive disadvantage to Google when it comes to search.
The key to a turnaround at Bing would be for Microsoft to develop and implement an approach to search that yields a much better return on search advertising investment than Google does.
If Penn can make that happen, I will eat my hat.
