Book review: Digital Wars

Summary:In 1998, the New Yorker writer Ken Auletta, author of Googled, asked Bill Gates which of his competitors he feared most. "I fear someone in a garage who is devising something completely new," Gates replied.

In 1998, the New Yorker writer Ken Auletta, author of Googled, asked Bill Gates which of his competitors he feared most. "I fear someone in a garage who is devising something completely new," Gates replied.

Microsoft's market capitalisation was then $344.6 billion, Apple's was $5.54 billion, and Google's was theoretically $10 million, based on a single venture capitalist's willingness to hand that "someone in a garage" $100,000 in return for 1 percent of the not-yet-real company. Microsoft accounted for 98 percent of the combined figures. Although the market sometimes behaves like it's electing the prom queen in the short term, market caps are pretty good long-run indicators. Today, the market values Google at $203.08 billion, Microsoft at $258 billion, and Apple at $564 billion. What happened?

Charles Arthur, the Guardian's technology editor, has a long history in technology journalism including stints at New Scientist and The Independent (and — obligatory disclosure — I've worked for him on all three). In Digital Wars: Apple, Google, Microsoft, and the Battle for the Internet he surveys the gamut of today's digital landscape as a series of pitched battles among these companies and their very different approaches: the web and search, digital music, smartphones and tablets. He concludes in 2011, with Microsoft stagnating, Google worrying about becoming too large and bureaucratic, and Jobs dying as Apple passes Exxon to become the world's most valuable company.

The story opens at crossroads for all three. Microsoft has just 'won' its second antitrust suit — it's a qualified win because, although the company had avoided being broken up, it was profoundly shaken. Like IBM before it (as recounted in Robert Heller's 1994 book The Fate of IBM), Microsoft reacted by soul-searching, assessing every new idea in the light of whether it would open the company to future actions. At Apple, Steve Jobs has just returned as CEO to a company so small that Michael Dell suggested shutting it down and returning the cash to shareholders. Google, meanwhile, was just starting to get noticed. Two years later, there would be two more new CEOs: Steve Ballmer replacing Bill Gates and Larry Page and Sergey Brin finding Eric Schmidt (after failing to land Jobs).

In business, as in sport, newcomers often prosper because reigning champions leave opportunities open. As Arthur recounts, many of the opportunities were created by Microsoft. Examples are its inattention to search and the loss of younger engineers who, having grown up with Microsoft as 'the evil empire', declined to work there (helping to explain Google's 'Don't Be Evil' motto), and mis-steps in digital music and smartphones, where it sorely underestimated the competition.

My favourite bit of the book is Arthur's discussion of the three companies' varying approaches to design. Microsoft is the crowd-pleaser, putting everything in so that no-one can complain their favourite feature has been omitted — an approach that leads to this video, if you have a few minutes. Google is data-driven: not sure which of two shades of blue drives the most clicks? Run a test with those two — and 38 shades in between. And Apple, as design expert Donald Norman is quoted explaining, was willing to offend some people in the quest for great design, resulting in products that its customers truly love.

Looking ahead, it's clear that social networking will be the next phase in the continuing battle to control the internet. Another story waiting to be told...

Digital Wars: Apple, Google, Microsoft, and the Battle for the Internet
By Charles Arthur
Kogan Page
264 pages
ISBN: 978-0-7494-6413-4
£14.99

Wendy M Grossman

Topics: Reviews

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