New Delhi: Microsoft CEO Satya Nadella has acknowledged that one of his biggest mistakes was failing to anticipate the rise of search, a market that Google successfully capitalized on.
Nadella explained that Microsoft initially believed the web would remain decentralized, not realizing that search would become its most valuable business model.

“It was a valuable lesson. We (Microsoft) missed what turned out to be the biggest business model on the web, because we all assumed the web was all about being distributed,” he said.
In a conversation with YouTuber Dwarkesh Patel, Nadella reflected on how Microsoft misjudged the importance of search, while Google recognized 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.

Satya Nadella also recalled being part of several major technological transformations throughout his career, including the shift from mainframes to personal computers, followed by the rise of client-server architecture.

He also discussed the emergence of the web, remembering how the launch of the Mosaic and Netscape browsers forced Microsoft to adapt.

Nadella noted that Microsoft successfully adjusted to the browser era by introducing a new way of building applications.IANS