This week, Yahoo announced that it will be beefing up its mail service to “[mimic] the look and feel of a computer desktop application like Microsoft’s Outlook”. This means that Yahoo is taking Microsoft head-on for dominance of the desktop. We are talking about the desktop in a generic sense, as the place that is the starting point professional and recreational computer usage.
The desktop represents a window on the digital world. In itself this is already a reason for trying to dominate it, but there is more. People buy computers in order to access content or contribute content to other people. This content consists of bits as well as the applications that make these bits meaningful (of themselves, bits have no meaning, not even a little bit).
Content costs money, so either you or your boss pays for the content, or it is packaged with advertisements. Microsoft lets you pay for the content through licensing fees. Yahoo lets you pay for the content through ads.
There are strong reasons why Yahoo and the likes are having more and more of an advantage in this battle. Getting computers in the hands of users, and keeping them in working condition is a major expense. In my own work I see analyses confirmed that this can be up to three times as expensive as the cost of the hardware and software. One of the reasons is the complexity of software installation on a Windows machine (it is probably not much better on Apple or Linux desktops). As a result of this we see corporations moving to ‘thin client’ infrastructure deployments, where applications reside on the net, rather than on the client computer.
Fully net based applications are incompatible with the traditional stand-alone personal computer paradigm, as elaborated by Microsoft. However, this stand-alone paradigm is, apart from a few isolated mobile pockets of resistance, outdated. More than 90% of business users and more than half of residential users are always-on at broadband speeds.
Yahoo’s model of advertisement supported content extends naturally into different types of content, be it software, information or entertainment. In fact this is what they have been doing from the beginning. It is less clear how Microsoft’s licensing model extends naturally into network centric content, although MSN is a bundle of services that aims to provide that.