We get into the subjectives of what makes natural-born blogger [NBB]. Here are some of the ideas.

1. An natural-born blogger doesn’t wait for permission.

2. A NBB explains things, even when they don’t understand. An NBB is often proved wrong, to which the NBB shrugs his or her shoulders and says something like ["So what"].

3. NBBs go first. If there’s an NBB around you don’t have to wait for a volunteer.

4. NBBs err on the side of saying too much. If you find yourself wishing someone would just [shut up already] you’re very likely looking at an NBB.

Note: Small edits for colorful language… :)

At first sight, it would appear that these points, while well taken, apply only to blogging. And almost in a too-obvious fashion at that.

Unless you have concerned yourself with all manner of business building and entrepreneurship mindset issues, like I tend to do, and take a second look.

Then it becomes clear to you that these are among the most important guide posts for all entrepreneurial activity, and by extension for success in life in a more general sense:

1. Successful people don’t wait for permission

They don’t wait for someone to appoint them to something important (which almost never happens anyway). They give themselves permission to go ahead, they self-appoint.

If you’re uncomfortable with that idea, then you have just identified an important mindset block that is very likely massively holding you back in your business building efforts or aspirations.

I guarantee that almost no one will ever appoint you the expert of your market niche, you have to give yourself permission to be that expert. Of course, you have to make sure you can back it up, else a self-proclamation will ring hollow over time. But the initial catalyst lies within you alone.

2. Successful people shrug off failure

Successful people shrug off failure as if it means nothing, because… well… it doesn’t. All you ever get is a result, all subsequent meaning of that result exists almost entirely in your head.

Any misstep means only that you must be getting closer to your goal than you were before (when you didn’t take any action at all). And of course hopefully you learned something in the process.

The only thing that truly IS tragic is not failure, but being caught in paralysis due to fear of failure. It keeps you suspended in an infinite “possibility loop”, never wanting to find out the truth by either getting proof-of-concept, or not, and moving on to the next concept. It’s a form of addiction to and idea or ideas we have come to hold dear.

Best to find out this week, this month if that idea is only robbing you of precious psychic and other energy…

3. Successful people are ahead of the curve

In branding/positioning there is the well-proven concept of “first mover advantage”, which tends to bestow disproportionate rewards on those that “show up early to the party”.

While the inventor doesn’t always get financial rewards, the Category Leader, the person or business that can install themselves as first for that category in the minds of the consumer (to be taken in the broadest possible sense of a marketplace here), almost always does.

Hence we get Microsoft being more or less unassailable in the business and consumer desktop computing space, while Apple became nearly as dominant in new categories that it either early and decisively jumped on (the iPod), or more or less created (the iPhone).

Anyone else piling into those categories is fighting an uphill, near impossible battle.

And all of this applies to your small business, or solopreneurship as well: Be first, or at least VERY early in something. Ideally by creating a whole new category, which is otherwise known as innovating.

4. Successful People Move The Freeline

While Dave Winer does not explicitly state it here, the idea of erring on the side of saying too much implies the principle I like to call “Moving the Freeline”:

You have to say AS MUCH AS POSSIBLE about what you are trying to get across to people, which means that you have to, in a sense, give your best ideas away!

You can’t hide them behind a Pay-Wall (and even $1 may be too much for people to begin to listen to what you have to say, what you have to offer).

You can’t operate in a way that says: “Once you pay, I’ll tell you something useful or important”.

You can’t drop mere hints about what you have to offer, you have to give away A LOT of the real thing.

Most marketing copy gets this wrong when it merely focuses on trying to persuade, rather than just showing a lot of the goods.

You have to give every possible reason for the other party to do business with you by telling them (nearly) everything you know that could apply to them, free of the irrational fear of being ripped off or plagiarized somehow.

Only then do you have a real chance.

And in order to be able to do this, you have to apply a mindset that most successful people have, what Eben Pagan would call “feeling wealthy right now”.

You see, unless you get to that point of feeling abundant in your ideas right now, you will hold yourself back from getting the business you deserve, because the other party cannot ascertain whether a transaction would be worth their risk.

Does Moving The Freeline Make You Nervous?

In case this kind of openness makes you nervous, you can calm yourself by understanding a few key truths:

The fear that someone wants to rip off your ideas is nearly always an illusion, usually you have the exact opposite problem, that of getting ANYONE to give a dear about you, your business, and your ideas.

Also, the so-called “Curse Of Knowledge” has you systematically underestimate how far you are leaving the non-expert audience behind as an expert in a given arena (see Heath & Heath, Made To Stick).

Even if they wanted to, almost no one would be in a position to replicate your deeper ideas from scratch, without incurring a very significant learning curve.

Of course, if they REALLY wanted to (which is a big if), they could catch up eventually. Which is where the “show up early” principle comes in.

But in the interim, you can, as a consultant say, tell a prospective business EVERYTHING you might do for them in great detail. And it still would be much more likely that they would hire you to work with them, rather than trying to turn around and execute all of these details themselves, cold, from scratch.

To finish up with an example, a prolific tech blogger like Robert Scoble is constantly giving his best ideas away. And certainly a lot of people would say that he can err on the side of saying too much. But that is also how he creates massive value up front, and keeps people engaged with his idea process.

Money and profit become side-effects of his massively “Moving The Freeline” in this way day in and day out. Do thou likewise…

I wrote a while ago that the attempt at humor had fallen flat precisely because Microsoft’s “The Powerbroker” archetype had been so deeply entrenched, almost literally burned into the mind of the consumer for decades. Did things get any easier from there?

The next salvo a few months ago featured the “I’m a PC” ads which cast Microsoft (by way of its supposed users) as a strange mixture of proud/aggressive and defiant/sulking. It was pointed out then that “Microsoft as Victim” just doesn’t really work. And again, the archetype branding explains why: You cannot be “The Powerbroker” and still garner much sympathy for supposedly having been wronged.

This same theme was picked up once more recently with the “not cool enough for a Mac” ad featuring a girl named Lauren, which really was meant to focus on price as an angle to attack the notoriously premium-priced “Mac” products. In theory the idea of highlighting one of your competitor’s weaknesses (price) is workable, especially during a severe recession. But you cannot do it while violating your core archetypes.

If Microsoft had said something like, “we are the largest software company on the planet, and because of that we can create economies of scale in the production of PCs and their loading with software that much smaller competitors like Apple just cannot match, thus saving you money”, it would have made some sense.

But not with this passive-aggressive jabbing built in. It confuses people. Instinctively, no one takes it seriously when the 800 pound gorilla complains about having “unfairly” been called “not cool enough”.

And then Microsoft recently launched another ad in the series that went all wrong yet again. Silicon Alley Insider explains why:

Jackson [the kid] mentions offhand he wants “a good gaming computer.” This is a fantastic line of attack for Microsoft: The Mac has a tiny library of professionally produced games compared to what’s on PCs [...] But Microsoft fumbles the ball, and doesn’t follow through with what’s arguably their best anti-Mac selling point after “PCs are cheaper.”

Instead, Jackson’s mom makes an incredibly off-target anti-Apple smear: Checking out the Macs, she says “they’re kind of popular with this age.” Umm, no. Kids can’t afford Mac prices or appreciate Mac build quality. Far better for Microsoft to stick with [...] Macs are kind of popular with hip adults, but expensive.

So the theme of hurt feelings clouding Microsoft’s positioning and marketing continues. In truth, as the incumbent and still near monopolist (85-90% share despite Apple’s recent inroads) in the personal computer market, Microsoft would do better not to mention “Mac” at all.

“The Powerbroker” archetype by definition can choose to ignore the much smaller competitor. Reacting to any perceived slight only makes people wonder what is going on.

But the branding confusion gets even more pronounced with the recent launch of a new series of Microsoft ads featuring a strange mixture of low key scrap-booking and CEO interview voice-overs, punctuated by a slogan of “Microsoft – The People Ready Business”:

First, scrap-booking is not exactly associated with CEOs. And the overall informal tone of the ads only heightens the confusion. While we can understand in principle where they were trying to go with this, softening up the image, making CEOs cool somehow as they are buying into the “people ready business” message, it just doesn’t work.

Why? Again because it violates “The Powerbroker” archetype attributions of which our mental image of a CEO is a prime example. It will never really fit with “The Loyalist” archetype (buddy/friendship/etc.) that is being angled for here. Your CEO will never quite be your buddy, unless you are on the board of directors or something like that (or maybe work at Zappos).

What’s the end result? Ads that don’t work, that don’t “stick” in your or anyone else’s mind, because they are just too confusing. Microsoft has tried a number of times in the past to bring “The Loyalist” archetype into its marketing (MS Office as your buddy brand at work, etc.), and it never really worked too well then either.

So what’s the solution? 1) Figure out who you are first, what archetypes make sense for you, what you truly want to stand for. 2) Communicate that consistently, without fail. If you did your homework in step 1), it should in fact be HARD to get step 2) wrong.

In Microsoft’s case, it should simply embrace that which it already is, “The Powerbroker”. It has served it exceedingly well in the B2B (Business-To-Business) realm, because “The Powerbroker” is something virtually every business person understands and intuitively respects.

Notice that most of its software has been sold to other BUSINESSES first, even if it ends up on the consumer’s home PC, or their computer at work. Why mess with that out of a sense of hurt corporate ego?

Since then, there have been a number of developments that both prove the power of this form of marketing, as well as its potential pitfalls.

Good news first: Apple’s iPhone has been flying off the shelves at a rate of 3 Million in the first month. And the new iPhone App Store has had very healthy downloads of both free and for-pay applications during that same time frame, to the tune of 60 Million downloads and $30 Million in sales (and all despite the launch weekend hiccups that "melted" Apple’s servers).

Apple is proving that there is real money to be made in an add-on app market, something that has eluded most other players so far, be they Google, Facebook, or MySpace.

So the mix of secrecy ("The Enigma" archetype) and The Magician (sometimes also called "The Change Master" archetype), that equals "The Wizard of Oz", clearly has been working for Apple.

A few weeks ago we were predictably fed more grist for the mill, when Apple made several more secretive yet enticing statements during its Q2/2008 financial reporting re: Q3/Q4 earnings projections, specifically the financial dent that an as of yet unnamed new product or product redesign or possibly significant price drop might make in the results for the second half of the year.

Cue the rumor mongering…

But maybe it has been working too well: Besides the launch hiccups already mentioned, there have been issues reported with the iPhone 3G’s battery life in 3G mode, as well as with Apple’s only tangentially related MobileMe storage/synching service that was supposed to replace Apple’s previous .Mac service.

A Bridge Too Far?

This latter change on top of and simultaneous to the 3G launch and the firmware update for the 1st generation iPhones may have proved the proverbial "bridge too far". The new service has been resoundingly panned, including by people that easily qualify as Mac/Apple enthusiasts (such as Walt Mossberg of the WSJ Tech Department).

And while hardware and other issues with the iPhone and other Mac products have been mostly annecdotal (read Michael Arrington of TechCrunch on his experiences here), the MobileMe issues are so universally acknowledged that Apple has been voluntarily adding several months of free service (usually priced at about $100/year) for users, along with strong mea culpa statements.

And therein lies the pitfall of successful Archetype Branding: Once you have "imprinted" your archetype or mix of archetypes upon the mind of John Q Public, you have to deliver on the promise or the associations that where developed at this point. Otherwise, you run the risk of offending more resoundingly, precisely because you bonded with your customers and prospects at a deeper, more meaningful level.

People’s Unconscious Minds (their "Inner Child") may respond with outright indignation or anger when the cherished association is broken up. "You really aren’t a Magician after all… ".

If your success outpaces your ability to deliver (in Apple’s case delivering working marvels of technology to a rapidly growing user base), you have a real problem. One would hope that Apple understands this and avoids too many repeats of this dilemma in the future. Else its stellar brand could be in serious jeopardy.

The three-way "negotiations" between Carl Icahn, the Yahoo board, and Microsoft turned up another non-starter offer for MSFT to cherry-pick Yahoo’s search assets, which in turn led to much finger-pointing, and general acrimony.

The result is that Icahn may now be out of the picture, and that Yahoo will survive through its August 1 shareholder meeting. Unless Microsoft comes back with a last minute complete buy-out offer at a guaranteed, cash-equivalent price that is ($29 per share would seem like the absolute minimum in this regard).

But it all seems increasingly unlikely, leaving Microsoft without a strategy, and Yahoo desperate to get past the distraction of the entire episode, and its operation back on track.

Jerry Yang is apparently begging his troops to keep working (for the second time in two months), and as I previously pointed out, for good reason. And even though we don’t hear similar exhortations form inside the Microsoft bunker, there is little doubt that Microsoft is not similarly affected:

During the entire first half of 2008, the only news out of Redmond other than the Micro-hoo botched deal attempts, has been the announcement of the "Live Search Cashback" (LSCB) attempt to sort of buy search query share using a rebate gimmick (that had failed to work before). That MSFT and some commentators touted this as a "game changer" proves the depth of their dilusion.

I have been working on a detailed post for why LSCB was such a bad idea in many (technical) ways, but the end-result is much easier to ascertain through some simple tests: I occasionally have been checking LSCB price quotes against Google search results for identical items, and the FREE(!) product listings at the top of Google Universal Search beat the LSCB prices with the "discount" (that MSFT is kind enough to hold in escrow for you for up to 2 months) MOST OF THE TIME!

I expect ComScores due out this week to tell the tale that Live Search Cashback has caused nary a blip on the search share radar screen. Even Microsoft seems to not be talking about it anymore…

During the same time frame, Google has had major announcements regarding their OpenSocial, GoogleGears, Google App Engine, and Google Android (Google’s mobile phone) software kits, all the while honing their core search and search ad serve in the background. Even Yahoo recently announced a relatively substantial opening up of their search toolkit to developers for third-party applications.

Back to Yahoo’s Serious Issues

In recent weeks, high level departures and reorg moves by the Yahoo board’s Sue Decker, have highlighted again how deep the rot of bloated hierarchies and excessive middle management has gone inside Yahoo. I had previously reported some signs of the same thing on this blog.

The question is if this can be turned around in any meaningful way. And by the way, there is a huge question as to whether MSFT/Steve Ballmer would be doing any better, they are not exactly masters of nimbleness and have ZERO credibility when it comes to making a profit on the Internet.

Yes, Yahoo still has reach and scale, but what is really needed is a clear vision and marching-order on what Yahoo is supposed to stand for going forward. Their lack of focus has been their achilles heel the entire time.

While Google has built "Google = Search" brand in a (mostly) disciplined way, which is one of the key reasons for why they have been able to monetize better on search (people come to their site with a relatively defined mindset), Yahoo = what?

Yahoo’s portal strategy has been an albatross around their neck almost from its beginning.

Add to this the slowness in response due to the excessive hierarchies, and that is all you need to know as to why they haven’t been able to compete with Google. It’s a simple focus and positioning issue.

(The argument repeated again in a comment on Silicon Alley Insider by supposedly a Yahoo employee that Google monetizes better vs. Panama due to larger query share is simply false: It is about the average user mindset/context gap. Remember that Yahoo once had a lot larger share of search. So that’s not it.)

The only thing that Yahoo can do now is to decide how they want to position themselves, ideally in a new category instead of as an also-ran, and then stick with it and execute. But that decision must come first.

I for one see a lot of potential in making Yahoo into one gigantic open social network from the inside out, and among other things leveraging their user base to create a supplementary user-generated/rated search a la Mahalo and Digg.

Plus open up all of the spickets to leverage open source development assistance. If they still want to be in search and search ads, outflank Google by opening up the kimono to advertisers and become the "transparent search ad platform" vs. Google who like to keep things close to their vest.

At this point, they need to create an undeniable, compelling reason to get the advertisers back and hence the monetization up. Also, if they can begin to create context-targeted "social ads" a la Facebook (only better) inside of a newly created "Yahoo as Social Network" (see above), they could leap-frog Google search because Google still knows very little of real substance about the individual user at this point.

It’s all about proof of concept right now, and the more radical the better, as only that can have a chance to generate mindshare and get people to start using the new services. Everything must be on the table. I hope Jerry and Co. are seeing this on the inside.

And while it’s fun to partake in all of the speculation and hand-wringing over specific features (iPhone App store, enterprise IT compatibility, battery-life), the truly important underlying dynamics can often get lost in the fray.

One such factor: The ingenious marketing employed by Steve Jobs and Co.

And it’s here that "The Magician", or more specifically, "The Magician" archetype comes into play:

As I first heard this pointed out by Rich Schefren and Jay Abraham in one of their "Maven Marketing" teleconference calls from earlier this year:

Steve Job’s is perfectly, and, we must assume, somewhat deliberately positioned as a "Wizard of Oz"-like character in the consumer electronics space, the magician who disappears behind the curtains and reappears with new, ever-more-amazing wonders of technology.

While I had studied archetype branding myself for a while, I must admit that I had never heard the Steve Jobs/Magician analogy used up to that point. And when the unveiling of the new iPhone 3G occurred June 9, Rich and Jay’s brief remark snapped right back into focus for me.

Here he was, Steve Jobs, "The Magician" on the stage of the WWDC (Worldwide Developers Conference).

Mind you there is a vast amount of orchestration going into this feat. From Apple design philosophies (their "clean" design could be seen to evoke "grail"-like associations!), to purposefully withholding detailed product information until the timed announcements at Mac conferences, to Steve’s own stage-craft in triumphantly unveiling the new gadget of the day.

Everything has to be just right to fully support the archetype. But in doing so, whether consciously or unconsciously, Apple and Steve Jobs are occupying a very valuable space in the minds of a fickle public. And "The Magician" image serves both an extremely useful guide-post (does this next action fit our archetype branding?), as well as a uniquely powerful marketing device in this respect.

It is a brand quite literally burnt deep into the neural networks of consumers world-wide, in a way that even the valuable Apple brand never will be:

Nothing sticks better in the mind than these largely unconscious, archetypal patterns, the original building-blocks of the human mind. At that level, you don’t have to explain very much at all. It’s simply understood, and universally so (archetypes hold true across all cultural contexts).

Many marketers and small business owners ignore this fact each and every day at their own peril, "leaving" the proverbial "piles of money on the table."

Photo: MacRumors

It’s no wonder this site failed so completely, Microsoft’s branding is 100% wrong and horrible: Meaningless, confusing, too long/not snappy enough, unmemorable, etc. etc.

They don’t get branding at all. I wonder if they’ll ever get off the "MS" and "Windows" train. If not, NOT A SINGLE ONE of their web properties thus branded will EVER have a chance to fully succeed. It cannot happen since it is against every principle of branding psychology.

There needs to be a simple answer to the question: "What’s a ____?"

Everyone and their dog knows the answer to "What’s a Craigslist?"

"Windows Live Expo"? Not so much. What does a classified ad site have to do with "Windows" (which presumably is an operating system)? Nothing. The entire "Windows Live" idea is horrible, but even if it had worked for anything else, this would only create brand dilution.

And "Expo"? What does an expo(sition) (i.e. a trade show or other exhibition) have to do with classified ads? NOTHING.

The idea that things can be subsumed under one’s current, possibly large and powerful brand is a very common mistake and self-deception with large companies. The logic is "our brand is powerful, why not extend it to this next project/product/etc.?" (And this is for obvious reasons very hard to argue against in internal meetings, as no one wants to appear to belittle the power of one’s "tribe"/brand.)

Here’s why it doesn’t work: Because the original brand if it worked at all was built up in the minds of the public as tied to the category that it competes in. Notice in this context that Microsoft’s other flag-ship, near-monopoly product, the "Office" productivity suite and even its sub-components, is named "MS Office" and NOT "Windows Office".

Microsoft would in fact have been better of naming the classified ad site e.g. "TheList by Microsoft" or some such thing, pretty much anything would have worked better than what they chose.

And notice that none of this has anything to do with the technology execution of the site. It’s just human psychology. Cheers!

Several times last week I was tempted to write this post, only to hold off for a while longer because I wanted to write something for my readers that would go well beyond a news rehash.

As I said in previous posts, it is easy to lose sight of the essentials in the dizzying onslaught of "Steve said, Jerry said…" titillation, investor and market timer stock price considerations, and "what’s the next step" agonizing. Instead let’s go back to Business Mind Hacks basics:

I have argued that the deal was never a good idea in the first place, and that this should have been the first and foremost question on anyone’s mind. Even now, there appear to be major Yahoo stockholders such as Carl Icahn, who are attempting to employ corporate board machinations to force the deal after all.

And of course there has been plenty of speculation that Microsoft would come back with the same or lower offer after having Yahoo’s stock price pummeled for a little while (incidentally, it didn’t go down quite as much as some had predicted, possibly a sign that the market viewed the deal was as in fact much less of a clear winner).

None of it would really matter as far as the fundamentals of the deal: That Google is the uncontested market leader in search and paid search ads, that neither Yahoo nor Microsoft have been able to compete effectively, and that they are falling further behind every day. (Notice recent earnings data showing Google’s search revenue is on track to surpass Microsoft’s flagging Windows/Vista revenues some time in 2009!)

There are several reasons for this, some technical, and some Branding/Positioning related and hence much more basic than the complex issues relating to e.g. paid search optimized monetization. I will further discuss the latter in another post. Let’s go with the branding issues for today.

A recent article in The Economist picks up on the same theme I have been "hammering" in a few recent posts:

Mr Ballmer [...] has invested billions trying to make Microsoft an internet and advertising superpower. But it seems not to matter. According to Danny Sullivan, a web-search analyst, Microsoft “literally has no brand” when it comes to its online services—nobody has ever been advised “to Live” or “to MSN” a recipe or a cute classmate.

But it gets better. While The Economist article was an overview piece on the break-up of the negotiations, ReadWriteWeb wrote a post entitled: "Microsoft’s Brand Confusion Runs Deep". And I couldn’t agree more with the tenor of it, and if you care about branding/positioning issues at all you should by all means read the full post. Here is a sample:

[...] slight differences in design may not be a very substantial issue, it is indicative of the confusion Microsoft has created around their Live brand. [...] Live was sometimes used to brand services, sometimes to brand desktop products, and sometimes destination sites. Worse, at times single products have had multiple names and sometimes the Live branding resulted in very clumsy product titles, such as "Windows Live Search for Windows Mobile."

And in all of this, ReadWriteWeb didn’t even point out the widespread but perennial corporate sin of brand dilution: While it is easy to see how large, powerful companies would prefer to engage in a sort of "brand hubris" and try to spread their brand-around to everything in sight, this just isn’t how things work at the level of the customer’s/consumer’s mental circuitry.

Ries & Trout made it abundantly clear in their seminal works on the matter, and data of decades’ worth of branding studies back it up: Once you have been lucky enough to establish your brand in a category/niche, you should avoid trying to stick it on other categories like the plague.

Because it confuses people, it quite literally messes with their mental mapping of names and what they stand for. It is quite noteworthy in this regard that the ReadWriteWeb post mentions that even Microsoft’s own employees appear at times confused about what "something-something-Live" really stands for!

If you think about it, as far as catching Google is concerned, Yahoo hasn’t been able to do it with moderate resources, but even worse, Microsoft/MSN/Live hasn’t been able to do it with nearly unlimited resources. Why?

Because the Windows/Microsoft brand acts as an albatross around the neck of any Internet play that they have attempted: Henry Blodget over at the Alley Insider already pointed out the unfortunate renaming of Hotmail into "Windows Live Hotmail", and they were even seriously considering ditching the Hotmail brand alltogether.

Horrible idea… and it truly makes you wonder about what might have happened to the (not perfect, but still much preferable) Yahoo brands in the case the Micro-hoo deal had gone through (or still might in the future).

Again, Ries & Trout point out that large companies are always in danger of, from the inside out, hastening their own brand dilution. This is because of the fallacy of the "we’re a big/strong/important brand" mindset, which makes "add-on-naming" things with your existing brand so seductive and almost impossible to argue against in say a company meeting. Nobody wants to be seen as arguing against their own brand, their own "tribe".

As I said, unfortunately it is wrong from a psychological perspective of how brands work in the minds of the consumers. It’s all about "tip-of-mind awareness" for a category. Simply ask "What is a ____?" If the answer is unclear, your brand is already diluted.

Kraft is a good example of this form of brand dilution. Incidentally, their only #1 brand is the one that they resisted naming "Kraft": Philadelphia Cream Cheese (by Kraft). Everyone knows the answer to the question "What’s a Philadelphia?" (in a food context). But "What’s a Kraft?" has no such clear answer.

A company that has done it right is Proctor & Gamble. Each one of their products tends to be built up as its own brand, and typically is the category leader commanding a serious premium: Tide, Dawn, Bounty, Duracell, Gilette, etc. (see the full list of P&G brands here). 

Test it, you’ll likely know the answer to almost each question: What’s a ____?

So Microsoft should create a new internet product that is for once NOT named MS or Windows, because frankly, the internet thing has little or nothing to do with Windows. It appears that it’s their built-in (maybe even unconscious) resistance to the internet that is always at play.

Which is another bad idea. You can’t let your ego get in the way.

What became the leading Web video site? "YouTube", and NOT "Google Video", and even less some theoretical monstrosity like "Windows Media Player Web-Edition Live Video Sharing… Site". :)

But Google had the good sense to let it go and simply acquired YouTube, while resisting the temptation to meddle with the brand. Their reward: A brand name that is already firmly anchored in the minds of consumers as THE video sharing site. "What’s a YouTube?" has a crisp and clear answer. Which is as it should be.

I rest my case… for today… more to come soon.

More so because they were veering head-long into serious "Business Mind Hacks" psychology issues related to Branding and Positioning.

In response to Henry Blodget’s focusing on the admittedly titillating details of the current negotiations, while mentioning only in passing the likely pernicious effects of the deal in its currently proposed form on both Yahoo and MSFT, I said this:

Why would Henry say "but that’s a different story"?

That is THE story… forget about the short-term, short-sighted, Wall Street angle… none of it will matter if Q1/2009 shows that Micro-hoo has fallen even further behind Google in search/paid search due to all of the distractions that are sure to ensue if this goes through.

Not to speak of the large-scale incompatibility of the two cultures, the potential losses in user bases for "synergized" services, etc. (especially if MSFT tramples all over everything with their typical "adroitness").

If Henry truly believes that this will be a disaster (and obviously I share his view), wouldn’t that mean that the MSN-spinoff-to-Yahoo-plus-cash option should be seriously brought into view, instead of as an after-thought?

A "friendly deal is best for all involved" ONLY IF it avoids the Micro-hoo "listing super-tanker" trap. More bulk will not solve the issues that MSFT’s and Yahoo’s respective bloated empires helped create.

In MSFT’s case, in my view they would have been so much better off if the company had been split up 8 years ago into 2-3 more agile/ nimble/ aggressive/ focused units. Who knows how well MSN (with different name) might be doing today in the internet space that MSFT despite all of the posturing is only an also-ran in?

And Yahoo’s portal approach was dead when the Web 1.0 bubble burst, they just didn’t know it yet. It goes directly against your basic Ries & Trout "Immutable Laws of Positioning": Don’t dilute the brand!

Ask yourself this question: "What’s a Yahoo?" This is the reason that Yahoo never made it into everyday language the way that Google, Xerox, etc. have.

* End of 1st comment. *

Then someone tried to say that the "as for Yahoo! never becoming a verb, it was an early decision specifically not to push that for fear of diluting the trademark", to which I just had to respond because it represents such a deep misunderstanding of the phenomenon:

Dan, the "verb usage" is not something that is decreed from up high, it is a question of the meme spreading through a language/population. And that only has a chance to work correctly if the new term (e.g. Yahoo) takes a "tip of mind" position for a whole new category. Which if "Yahoo" ever did, was diluted so quickly that it had no chance to stick in this way.

Notice BTW that similarly every new venture Google tries under it’s Google brand tends to merely slog along, because a "Google" is a "search engine". So Google Video as a brand loses out to "YouTube". Focus. Simple.

Of course Google was smart enough to recognize this and buy them. "What’s a YouTube?" has a clear answer in a way that "Google Video" never did.

Yahoo BTW just violated this again by adding video to flickr, which evoked predictable groans from the "photography purist" heavy-user set. Now it’s "a flickr is a photo sharing site plus a sort-of video sharing site, like a mini-YouTube"…

Instead of trying to compete with Google in areas that it has already locked up (and "just google it" is merely one component), MSFT and Yahoo should innovate and create entire new categories of search and/or ad services, instead of saying "we sort of kind of have an Adwords too…"

Problem is, as an even bigger/more bloated juggernaut, the chances of that happening, and even in the event that it does happen, it getting "past committee" through the ever increasing layers of bureaucracy, are slim to none.

* End of 2nd comment. *

It is well worth studying your Ries & Trout on these matters, it’s all laid out clearly and supported by reams of real-world examples for all that wish to see clearly.

Back to more titillation :)

Granted, the negotiations and prospect of either a walk-away or proxy battle by MSFT including "poison pills" can be mesmerizing and mind-boggling to people interested in these kinds of industry developments, or their stock market angles (also note the new Yahoo board proposed by Microsoft, for the event of a proxy battle – this came via TechCrunch).

But none of this has much to do with the most basic questions: Is this deal a good idea? Will it work? As you know, I already placed my bet.