Do Microsoft and Google compete?

Do Microsoft and Google compete?

Summary: Given all the pixels spilled over Microsoft and Google, the answer is obvious. Except to me.

TOPICS: Google, Microsoft

Given all the pixels spilled over Microsoft and Google, the answer is obvious. Except to me. Try this on for size:

  • Microsoft sells software
  • Google sells advertising

If you can figure out how selling advertising competes with selling software, you are smarter than me.

They aren't competitors - for revenue. They do compete for a lot of other things, like really smart engineers and scientists, media attention, stock appreciation - expect none from either, they are fully valued - and innovative technologies.

It's just like Hollywood For about a decade, every movie Tom Hanks made did very well at the box office. Ditto with Tom Cruise. Lately, both have faltered. Hollywood is looking for the next Tom Hanks and the next Tom Cruise. Brad Pitt? Matt Damon? Mark Wahlberg? Clive Owen?

Microsoft was the fair-haired boy of high-tech for a decade after its IPO. Gates was hailed as a conquering hero. The steady stream of billionaires and centi-millionaires excited admiration and envy. Their every move was dissected for signs of genius and/or Machiavellian calculation. Then as their stock price stagnated in the late '90s and mega-wealthy execs jumped ship, the excitement ebbed.

Google is to Microsoft as Microsoft is to General Electric If Microsoft is Tom Hanks, Google is Brad Pitt: younger and sexier. They aren't competing for the same roles. And neither are Microsoft and Google. Both companies roles are set at the 90% level. Ballmer's continued sniping at Google is simple jealousy, not business necessity.

But what about Google's MS Office-killer? SaaS? Search? Web 2.0 (whatever that is)? Microsoft's best days are behind it. Its world-leading gross margins are under a relentless, long-term attack. The direct assaults are coming from free and open source software. The entry of two billion poor people into the industrial world has created a new market for ultra-low-cost computing. Those people will never pay Microsoft's prices. They will never buy into the Microsoft infrastructure. The free alternatives are good enough.

The biggest threat to Office is open document formats, not Google. Once the formats are there, and people start using them, the way will be open for free and low-cost alternatives. Microsoft will drop its price - again - and Office will remain dominant. Just not as profitable.

The indirect assaults are coming from smart phones, media players, game consoles - anything that takes people away from computers and Microsoft's desktop stronghold.

So who does Google compete with? Traditional advertising outlets, of course. (I sometimes wonder why they don't take Craigslist out and then get more aggressive about monetizing local "free" ads.) Database vendors: search is just another way to access data. Yahoo and MSN. Hey, Microsoft finally made the list!

The Storage Bits take As I've documented on my other blog StorageMojo Google's strong position in search owes a lot to its innovative infrastructure. Yet conflict sells more papers than innovation, so you will be reading about Microsoft vs Google for years to come.

Comments welcome, as always.

Topics: Google, Microsoft

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  • Nice article

    I agree with just about everything you say. TBH you're saying nothing new - we all know these facts already but it's soooo much fun watching the MS-Fanboys defend their godhead from any threat no matter how slight.

    As many posters on these fora have pointed out - often over a period of months or years - the biggest threat to Microsoft is ODF and open formats.

    Oddly enough, the biggest threat to Google is Google. They've got to sort the copyright issues caused by YouTube and their "books database" projects.

    As far as Microsoft competing directly with Google via MSN it is no competition. Whilst MSN bots seem to pick up sites quicker than they used to, Google has the mind-share. You don't "MSN" something, you "Google" it. Google's ultimate accolade is that it has become eponymous which is something Microsoft has never achieved.
    • Youtube and publishers.

      "Oddly enough, the biggest threat to Google is Google. They've got to sort the copyright issues caused by YouTube and their "books database" projects"

      Google know what they were getting into before purchased Youtube and as sites such Groklaw are showing, the real interest is still in the independent artist and not the content of the large media companies. It also seems that Google has a lot to gain by setting a legal precedence so they just waited for the suits to come. Viacom might want to paint Youtube as just a napster, but in reality it is quite different and the law seems to be on their side to begin with.
      • Trust a lawyer? Are you nuts??

        [i]"Google know what they were getting into before purchased Youtube and as sites such Groklaw are showing,..."[/i]

        Companies in the past have relied on lawyer's opinions only to get wiped out by other lawyers with different opinions - SCO springs to mind as does the Microsoft/Xerox business that made it all the way to the supreme court because both sets of lawyers were convinced that they were right.

        In fact lawyers disagree with each other so often that that is *why* you have an appeals court and a supreme court. It's a helluva gamble to bet your company's future on.
  • I agree

    MS currently is no competition to google (on the search side, google is no competition in the office app space), MSN aside, but the real thorn in MS's side is that Google found, developed and now exploits an entirely new revenue stream that MS didn't invent, doesn't control and is beyond envious of.

    MS would like to be all things to all people for all technologies at all times, and when it isn't, it gets a little sidetracked trying to outdo the one who has been successful. (Apple and Google as examples).

    MS would like to, and will continue in an effort to compete with Google. MS would be served by focusing on making what they do well, even better, and not try to, ineffectively on some fronts, compete with try to own all technologies. I don't think this is something Balmer can bring himself to concede or do.

  • MS Messiah complex.

    It is kind of like a messiah complex. Microsoft seems to think that they have a divine right to control every market they might move into. Thus even though MS and Google don't compete directly it doesn't stop MS's CEO from crying about Google. The same goes for Linux and Open Office etc etc. MS just despises what they perceive as competition and cry because they can't do anything about it.

    I would imagine that others are getting tired of the crying, ranting and temper tantrums and the whippings are just going to become more frequent until they learn to play nice with others.
  • Good post

    Does Google compete with Microsoft?. H mm.. I don't think so. The vice versa might be true. Google is encouraging more competition to Microsoft indirectly by proving that you can threaten MS by being successful.

    I am trying to send a track back from haloscan and am getting an error message. Any ideas?

    Problem: Target doesn't appear to be a valid trackback URL (debug information below)
  • Does MS compete with Google?

    The comment about Google not competing with MS, but MS might compete with
    Google, is a sign of how far MS has fallen. It is like the competition between two
    regional cities, like New York and Boston, or Seattle and Portland. The people in
    the bigger city never think about the smaller one - while those in the smaller one
    do a lot.

    MS should, IMHO, focus on fixing their processes so they can create compelling PC
    experiences. By letting their main franchise become a PITA, they are undermining
    everything else they might do.

    R Harris
  • Microsoft and Google are headed for a new arena

    I don?t see eye to eye with you on heating competition status of Microsoft vs. Google.
    The hunt is on, but you are chasing after a red herring.

    Microsoft is a pro boxer and Google is a pro wrestler. On the surface, they don?t look like competitors. But both of them are sick and tired of being a boxer or a wrestler.
    Both of them are looking for a new arena.

    Both of them are already moving into a new arena: K1.
    Microsoft and Google are entering a new battlefield of ?mobile advertising?.
    Microsoft bought ScreenTonic and aQuantive, where as Google bought DoubleClick.
    $6 billion went to aQuantitive, and $3.1 billion went to DoubleClick.
    Chrysler unit of DaimlerChrysler went for sale at $7.4 billion.
    You know where the battle cry is louder.

    The technology pendulum has swung to mobile technology. It doesn?t mean extinction of desktops, but even the mobile technology has already started cladogenetic evolution:
    The ongoing shift is pointing to a treelike branching from laptops to portable hand-held and again from hand-held to dashtop mobile.

    The battery life for notebooks, safety issues for hand-held, and the growing demand for bigger screen may combine to monetize dashtop to find a new arena for mobile technology.