Can a little-heard-of man from Hyderabad do the near-impossible for Microsoft’s audacious gambit to catch up with Google in the most difficultterrain of all—search? Even as software giant Microsoft struggles to consummate its $44.6 billion unsolicited bid for Internet company Yahoo, one of the company’s executives, Satya Nadella, is finding himself thrust into the unlikely spotlight.
Nadella, senior vice-president for Microsoft's search, portal and advertising platform group, is trying hard to focus on business as usual in Microsoft’s online division even as he faces an uncertain future. In other words, the MSN portal and the Live Search business, and big bets on getting advertising revenues from services now rest on Nadella’s shoulders.
Though a company veteran, Nadella is seen as a greenhorn in the search business. Still he is expected to play a pivotal role in Microsoft’s efforts to integrate Yahoo, if successful in the acquisition, say company watchers.
If he clicks, Nadella might join another Indian, Chennai-bred Sivaramakrishnan Somasegar, who was Corporate Vice President of the Windows Engineering Services and Solutions group within the Windows Division at the core of a key boost to the world’s most popular operating system platform.
“Satya is relatively new in search and has been in his latest position for less than a year,” says Matt Rosoff, principal analyst with independent research firm Directions on Microsoft. “Still he will have a pretty big role in how Microsoft consolidates its business if it is successful in buying Yahoo.” Nadella declined a request for an interview.
Nadella, a 16 year veteran of Microsoft, grew up in Hyderabad and graduated from Mangalore University with a degree in Electronics and Communication engineering. He is also listed as a 1988 alumnus of the Manipal Institute of Technology. He joined Microsoft in 1992 with a Master’s degree in computer science from the University of Wisconsin after a stint at Sun Microsystems. Nadella also has a Masters in Business Administration from the University of Chicago. At Microsoft, Nadella started his career as a program manager in the Windows Developer Relations group and rose up the ranks to lead the Microsoft Business Solutions group, responsible for the Microsoft Dynamics product line that manages enterprise resource planning and supply chain management.
“I was impressed by how technical Satya was,” says Mary Jo Foley who covers Microsoft for the blog, “All About Microsoft.”
“He can go really deep technically as much as any programmer and he’s a real straight-shooter,” says Foley who has known Nadella for a few years.
Still Nadella’s appointment to the search and advertising job at Microsoft came as a surprise, considering his expertise in enterprise software that targets corporate customers. Nadella also seemed to take on a role where the odds were stacked against him. Microsoft ranks a distant third in search and is facing a losing battle against its fiercest competitor till date, Google. “Whoever takes the search job on at Microsoft needs to come up with a miracle to go beyond the 10 per cent market share that the company has,” says Foley. In February, Nadella sent out a memo to employees laying out objectives for the year that gave analysts a glimpse into his plans. His goals outlined in the note included developing a strong “destination search experience,” reinventing the MSN portal, scaling the company’s ad platform and emphasising innovation and agility at the group.
If Microsoft buys Yahoo, it is likely to consolidate search and offer advertisers a single platform, says Rosoff. “By that Microsoft can have advertisers buy one campaign and reach 30 per cent of the market,” he says. “That’s how Microsoft can become a player significant enough to take on Google.” In that case, Microsoft might keep the back-end search engine technology separate but use Microsoft’s adCenter platform, rather than Yahoo. On the MSN side though, Yahoo may emerge the winner. Yahoo’s online content has been a strong suit and the company’s finance and sports sites are among the top destinations for users.Nadella’s future along with the company’s online plans is uncertain. After a Microsoft-Yahoo merger—if that comes about—it is unlikely he can continue to head the search and advertising initiatives at the company, say analysts.
Foley says she believes Brian McAndrews, former CEO of digital ad agency aQuantive (a company Microsoft acquired for $6 billion last May) could end up as Microsoft’s top guy in search and advertising. “McAndrews is seen as someone who really gets advertising and when the Yahoo deal happens we will have to see if Satya can hold on to his current responsibilities,” says Foley. Nadella will also have to fight what company watchers see as an intensely political battle for the job, going up against not just other Microsoft executives but also Yahoo’s top management. “I don’t see Satya being just tossed out as he has a pretty senior position now,” says Foley. “The question is whether he will be able to maintain that.”
For now, Nadella seems focussed on the job at hand, despite a looming change in the company’s strategy. “So far, he has been doing what he promised with regular updates to search,” says Foley. Microsoft is expected to launch a new Live search product, codenamed “Rome” sometime soon.
“The one thing he hasn’t done is grow Microsoft’s share in search but I don’t know if anyone could have done that,” says Foley.
(The author is a Silicon Valley-based journalist)