Microsoft pivoted to surveillance capitalism under Nadella after missing early search-ad opportunities

Evidence

Among the remaining three of the largest internet companies, Microsoft, Apple, and Amazon, it was Microsoft that first and most decisively turned toward surveillance capitalism as the means to restore its leadership in the tech sector, with the appointment of Satya Nadella to the role of CEO in February 2014. Microsoft had notoriously missed several key opportunities to compete with Google in the search business and develop its targeted advertising capabilities. As early as 2009, when Nadella was a senior vice president and manager of Microsoft’s search business, he publicly criticized the company’s failure to recognize the financial opportunities associated with that early phase of surveillance capitalism. “In retrospect,” he lamented, “it was a terrible decision” to end the search-ad service: “None of us saw the paid-search model in all its glory.” Nadella recognized then that Microsoft’s Bing search engine could not compete with Google because it lacked scale in behavioral surplus capture, the critical factor in the fabrication of high-quality prediction products: “When you look at search… it’s a game of scale. Clearly we don’t have sufficient scale today and that hinders… the quality of the ad relevance which is perhaps the bigger issue we have today.” — Shoshana Zuboff, The Age of Surveillance Capitalism, 505