Google Beats Microsoft, and MIT Beats Harvard, At Least in One War Game

Cambridge, MA — Google's high-tech sparkle was on display at the all-day “Battle for Clicks” war game between students from Harvard Business School and the MIT Sloan School of Management Sunday (April 10). MIT Sloan students who assumed the identity of Google overcame strong challenges from a Harvard team representing Microsoft, as well as student teams representing Yahoo! and AOL/Time Warner to win the game, and capture the $5,000 winner prize.

The game was run by Fuld & Company, a Cambridge- and London-based strategic intelligence consulting firm, which typically conducts such games for corporations in private, closed-door sessions. This is the first time such a game has ever been run in public, and the first such competition involving students from these two world-class business schools. A war game is neither a war nor a game, but rather an enlightening analytical exercise that often leads to truly creative business strategies.

The Google team pushed a strategy of global growth, deepening penetration into the enterprise, spreading search technology beyond computers into other electronic devices, and developing more partnerships. A panel of judges from Forrester, IDC, MFS Management, and Jefferies & Company rated the teams, and had Google first, Microsoft second, AOL/Time Warner third, and Yahoo! fourth.

The Google strategy impressed a Google Associate Product Manager in attendance, Enrique Muñoz Torres. “I was impressed by the depth of analysis that went on,” he said.

Torres pointed to comments from some team members as to the importance of Google maintaining technical superiority: “In competing with Microsoft, having the highest quality product isn’t enough.”

The competition, which lasted all day Sunday, was a see-saw battle. At the event’s midpoint, TimeWarner held first place, focusing on its 22 million AOL users, 19 million of whom use Instant Messaging. Since users are abandoning dialup for DSL and Broadband, the TimeWarner team focused on strategies to keep its Instant Messaging users as well as users who want a “clean experience” (no spam or viruses) and no adult-rated material.

As part of the competition, Fuld & Company challenged the students to deal with a series of plausible political events that would have severe repercussions for each of the companies. For example, Mike Sandman, the Fuld facilitator, fired this scenario at all four teams:

Taxing the Internet: The Federal Communications Commission enacts regulations enabling states to collect sales taxes on e-commerce based on where the buyer lives, not where the company is based. These events are expected to dampen online sales and online ad revenues. Consumer cost would be an average of 67 cents a month for AOL users, and $1.57 to $1.98 a month for DSL and Broadband users.

All four teams shifted gears to strategize their survival. The company teams made offers for mergers or licensing agreements with each other, with all of them pursuing Time Warner and its highly prized print and broadcast content.

Throughout the War Game, teams had to focus on economist Michael Porter’s Four Corners Analysis: drivers, assumptions, current strategy and capabilities, before developing future strategies. The teams claimed their major benefits to customers were as follows:

• Yahoo! has the most eyeballs, with users willing to pay for personalized content.

• Microsoft has the most cash, owns the desktop platform, MSN and Hotmail.

• Time Warner has content, print and broadcast media venues for bundled advertising, and the most popular instant messaging service.

• Google has a worldwide consumer market with 30-plus percent of its revenues coming from outside the U.S., content in 100 languages, and the most ubiquitous search engine.

“The game ended with the same excitement and strategic inventiveness with which it began,” concluded Leonard Fuld, president and founder of Fuld & Company. “All four teams described plausible yet innovative strategies that were applauded by both the panel of judges and by Mr. Torres, the observer from Google. While the MIT-staffed Google team won, the arguments and counter-arguments flying across the room added to everyone’s strategic knowledge. This was the ultimate benefit from this and every other war game – both this unusually public session, as well as the more typical private forums.”

Fuld has conducted War Games and competitive intelligence assignments for more than half the Fortune 500 and Global 1000 and looks forward to having these students meet in another similar war gaming encounter next year.

For more information on war games or to order the DVD on the entire event, contact:

US
Leonard Fuld or Michael Sandman +1 (617) 492-5900
126 Charles Street
Cambridge, Massachusetts 02141

Europe
Tony Nagle +44 (207) 659-6999
20 Conduit Street
London W1S 2XW UK