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June 4, 2007

Keynote Conversation with Satya Nadella

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Almost done with day one, folks. Don’t wimp out on me now.

It’s time for introducti — oh, no! Danny just introduced Satya as a "15-year-old" instead of a "15-year veteran". Smooth, Danny. In case you don’t know, Satya Nadell is Corporate Vice President of Microsoft’s new Search & Advertising Platform Group.

When talking about Microsoft, Satya says that there’s a lot of fire and desire in Microsoft’s teams to do stuff and to contribute. The question they’re facing right now is how do they go from where they are and show that innovation. He says that in some ways, Microsoft has very little to lose. (Did he really just say that? They can’t be the right attitude.)

Satya speaks about Microsoft’s Search & Advertising Platform group and says there is logic in bringing the ad and search sides together because there’s a lot they can do together. The fact that Microsoft has a full page that has to be relevant to users’ means there’s plenty of room for integration. Bringing the engineering teams together is something Microsoft is focusing on.

[Good heavens. Satya talks faster than Michael Gray. How am I supposed to keep up with this? And at the end of the day, no less.]

Danny: What do you see as the biggest challenge you have to deal with?

Satya responds that at some level when you are 10 percent share in the US, you’re forced to face up and realize that that’s the challenge. How do you grow that share so that advertisers are getting more eyeballs? How do you make a present a better search experience so that advertisers want to associate with you?

If you look at the total number of unique searchers using Microsoft, Satya says its approximately 55 million unique searchers a month. That’s about 50 percent of what Google has. That’s not bad. He says that Microsoft has over 500 million users worldwide. That’s a lot of users. They want to crack the code and figure out how to keep those searches. That’s where you’ll see them do a lot of experimentation.

Overall, being able to really get contextual search around the entire Microsoft network and increase engagement is perhaps job number one.

Danny: How do you do some of the distinguishing between Google, Yahoo or Ask?

Satya says it takes a lot to be in the search business. He feels like if you think about the sophistication of the Microsoft platform they’ve finally reached a level of maturity, a level of investment.

Danny: How do you differentiate? You realize there’s something beyond the page with ten blue links.

Satya says 3D is where Microsoft differentiates itself. They think that 3D Web will happen. It’s great for new advertising and for mapping locations. Microsoft also has a rich mobile application.

He says they’re trying to get high share in some of the verticals. He repeats his "when you’re only at 10 percent share" mantra and says verticals are a priority. Satya doesn’t think he’s in the search game only to win or get their fair share in the verticals. He wants to do both, but at the same time they feel they have the leadership in some of those verticals and they’re going to take it.

On the ad side, he talks about last year’s launch of adCenter and comments that Microsoft is pretty happy with it. The thing they mostly want to focus on right now is based on the feedback they’ve received. They want to improve the quality and the usability of adCenter. They’re going to put a lot of emphasis on basic usability. They’ve also been doing interesting things at adlabs.microsoft.com.

Danny asks Satya about Microsoft’s recent acquisition of aQuantive and asks if that isn’t a conflict of interest.

Satya says Microsoft definitely wants to keep them. If you think about it, he says, aQuantive has cracked the code on this one. It’s fair to say there will be a different lens with Microsoft involved, but they intend to make sure that the flexibility Avenue A has to service their clients remains. The fact that Microsoft is publisher and has a technology arm won’t affect the way things are run. The clients of Avenue A can be assured that Avenue A will have all the same policies to protect their interests.

Changing focus, Satya says that at the end of the day, MSN is where all of Microsoft’s traffic is. They have to keep pace on MSN as a portal. That defines everything. You’ll also see them innovate with the Windows experience.

Danny asks Satya how he prepared himself for his new role at Microsoft.

Satya says the best way to really energize yourself late in your career is to jump into something new. Hell yeah, Satya! He says the past month has been really refreshing for him. His job is to take Microsoft’s friction and enable their team to do their best work.

Microsoft’s long term dream is to create the best search interface and provide the best search results for a given query. We’re in the first phases of search innovation, he says.

During the Q&A, one attendee asks if Microsoft would extend financial rewards to users who promise to use Microsoft search.

Satya laughs and says he’ll ask his boss. Hee.

Danny asks Satya if there are any glimmerings of pause for their mapping service after the privacy concerns that arose after Google’s released its street level view.

Satya says it’s something they’ll track. At the end of the day, you have to ask how much you want to put the users in control. If users feel that having the imagery outweighs the privacy concerns, we’ll listen. But if the privacy concerns are paramount, then you’ll see us find some kind of equilibrium.
Danny: In the past month, we’ve seen Google Universal Search come out. What’s Microsoft’s take on that?

The short answer is that Microsoft is working on it. They really believe in taking advantage of full page real estate. There’s a page architecture that’s evolving the same way Google’s is.

When asked why users should use Live.com he responds because there is an aggregation of a lot of features. Search is one of those real universal things. Every query is different. Every searcher has a different need at a different time.

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