Weaknesses
Geographic concentration
Microsoft has concentrated operations in the US. Microsoft has its business across the world and
has offices in 103 countries. However, revenues from the US contributed to 62% of the total revenues
of the company in 2007. While the other countries accounted for 38% of the total revenues in the
same year. Heavy reliance on the US market exposes the company to adverse socio-political and
economic changes in that region.
Decline in search engine market share
Microsoft’s MSN search engine is witnessing a declining market share in search engine segment.
In 2007, Google maintained its status of market leader with 52% of the global market share, while
MSN search occupied the fourth place after Google, Yahoo and Google U.K. MSN had a market
share of 4.3% in 2007, declined from its market share of 6.9% in 2006. In 2006, Google had a market
share of 50%.The declining share of MSN search engine could hamper the company’s future strategy
of generating revenue through online services.