The Slow and Anonymous Death of Microsoft Online Video Services

The viral video market is just another facet of Microsoft's failure to establish a strong Internet presence, after the company's efforts in the search field. However, while on the search engine market, Microsoft is now a traditional occupant of the number three position behind Google and Yahoo, when it comes down to online video services, the Redmond company is anodyne. As it is the case with its two search engines, MSN and Live Search, Microsoft is also chasing two rabbits on the viral video market with MSN Video and Soapbox on MSN Video.

Both Microsoft video services account only for a limited relevance among rival offerings, but Soapbox is as if it didn't exist at all. When YouTube co-founders Chad Hurley and Steve Chen where accepting offers for the service in 2006, Microsoft said no. Google instead accepted to pay no less than $1.65 billion in November last year. And it proved a gambit worth while. The Redmond company instead chose to respond with Soapbox. The touted Microsoft YouTube killer has yet to come out of beta stage, and has gone through some extensive private testing phases designed to add functionality, revamp the graphical user interface and introduce copyright filtering.

The ongoing development process has obviously hurt Soapbox's audience, but MSN Video has no excuse in this aspect. MSN Video lags not only behind Google and Yahoo, but also MySpace Videos. Meanwhile, YouTube is literally slaughtering the competition: "YouTube's growth has not begun to slow yet this year. Hitwise traffic data shows that the market share of US visits to YouTube has increased by 70% when comparing January 2007 to May 2007 (this only includes site visits, not streams or streams from views on embedded videos). In comparison, the market share of visits to a custom category of 64 other video sites increased by only 8% in that period. As of May 2007, YouTube's market share was 50% greater than those 64 sites combined," stated LeeAnn Prescott, a Research Director at Hitwise.

YouTube accounted at the end of May 2007 for no less than 60.02% of the online video services market share. MySpace is credited with 16.08%, Google Video with 7.81%, Yahoo video with 2.77% and MSN Video with just 2.09%.