Satya Nadella on Microsoft’s Biggest Mistake: We Missed Search Engine Bus

Who would have thought that search would be the biggest winner in organising the web? We obviously didn’t see it, and Google saw it and executed it super well - Satya Nadella, CEO, Microsoft

New Delhi: Microsoft CEO Satya Nadella has admitted that one of his biggest mistakes was failing to predict the dominance of search, a market that Google successfully capitalised on. He said Microsoft had initially assumed that the web would remain decentralised, not realising that search would become its most valuable business model.

Calling it a valuable lesson, he said: “We (Microsoft) missed what turned out to be the biggest business model on the web, because we all assumed the web is all about being distributed.”

In a conversation with YouTuber Dwarkesh Patel, Nadella reflected on how Microsoft miscalculated the significance of search, while Google identified its potential and executed its strategy flawlessly.

“Who would have thought that search would be the biggest winner in organising the web?” Nadella said. “We obviously didn’t see it, and Google saw it and executed it super well. Understanding a technological shift is not enough; companies also need to recognise where value creation will happen,” he said.

He noted that adapting to changes in business models is often more challenging than keeping up with technological advancements.

“These business model shifts are probably tougher than even the tech trend changes,” the Microsoft CEO stated.