Google beats Microsoft, and MIT beats Harvard, at least in one war game

MIT Sloan Fellows assume identity of Google in an all-day “Battle for Clicks” war game

CAMBRIDGE, Mass., April 27, 2005 — Google's high-tech sparkle was on display at the all-day “Battle for Clicks” war game between students from MIT Sloan School of Management and Harvard Business School on Sunday, April 10. MIT Sloan Fellows 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 & Co., a Cambridge-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 MIT Sloan Fellows team that represented Google was well prepared. “The competition focused on strategy development,” said Brian Courtney, one of the MIT Sloan Fellow participants. “Our current classes in technology and marketing strategy gave us the confidence to debate anyone.”

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.

“I believe we won because we competed as a team,” said Courtney, “We worked together studying the materials and we shared all relevant research so we were all equally prepared. We also brought a great deal of work experience to the table. Because of this we weren't tempted to overreact to the fictitious market changes that the game presented.”

The Google strategy impressed a Google associate product manager in attendance, Enrique Muïoz 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 Sloan Fellows team representing Google 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.”

Said Courtney, “MIT won because we worked together to understand the market and the companies involved. Without the team effort in preparation, I do not believe we would have done as well. Because we prepared as one, we won as one.”

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.

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