Google Vs. Microsoft

We all know that Google is no longer just a search company. In fact, Microsoft perceives Google as a major threat to its supremacy. Bill Gates may well be losing his sleep over Google, as in spite of his efforts, Microsoft has failed to slow down Google.

An article in the Fortune magazine that talked about how Google with all its innovations and success has Microsoft worried. Here is the summary from the article:

1. Bill Gates sends an email to a handful of execs saying, ‘We had to watch these guys. It looks like they are building something to compete with us.’
2. Microsoft is facing corporate identitiy crisis. Every month Google hires away one of the Mircosoft’s top developers. Recently, Marc Lucovsky, one of the chief architects of windows, left Microsoft for Google.
3. To rub it in Microsoft’s face, Google even setup an office five miles down the road from Microsoft’s Redmond, Wash. Headquarters.
4. Microsoft spent 150 million in ad campaign and another 150 million to develop MSN Search, noted in the inner Microsoft circle as a Google killer. But it failed to create any buzz and Microsoft only holds around 13% of search users. I think that also happens because of MSN set as a default page.
5. Hardly anyone talks about Hotmail anymore, it is Gmail with 2 gigabytes that is really cool.
6. Hardly anyone knows or uses Photo Story from Microsoft. Compare this with Google’s Picasa the very popular photo management software
7. Recently launched MSN Spaces is late to the world of blogging. Blogger still remains number 1.
8. Microsoft’s desktop search tool was two months behind Google’s. “Here Microsoft was spending $600 million a year in R&D for MSN, $1 billion a year on Windows, and Google gets desktop search out before us? It was a real wake-up call,” says a Microsoft exec. People said, ‘If they can do desktop search, what prevents them from doing a version of Excel, PowerPoint, or Word, or buying StarOffice’
9. Google’s Maps and Satellites caused a great buzz among internet users. Microsoft has Mapblast; but Google Maps are way cooler.
10. In spring 2003, Gates told one of his executives, “These Google guys, they want to be billionaires and rock stars and go to conferences and all that. Let us see if they still want to run the business in two or three years.” Well, Mr Gates, Google has survived two or three years and is still rocking.
11. In fall 2003, Microsoft briefly considered buying Google, only to realize that even if Brin, Page and their board could have persuaded to sell which seemed unlikely; Microsoft would have been left to explain to the world why it was running a search engine built entirely on Linux instead of Windows.

Unfortunately, Microsoft is battling some old warriors from its previous competitors. Eric Schmidt, the CEO of Google, has been battling Gates as CTO of Sun Microsystems and CEO of Novell. Omid Kordestani, Google’s head of ad sales, was a top executive at Netspace. Three of Google’s directors, Ram Shriram, John Doerr, and Michael Moritz, have been on the front lines of Silicon Valley’s war with Microsoft for over the years.

One reason Google has been rolling out so many new or improved products is that Schmidt understands that innovation is the only sure edge Google has. The moment Google allows itself to slow, Microsoft could overwhelm it.

Here is the article.

So, is Microsoft losing its edge. It is too early to say. One thing that Google does not have is huge cash. Microsoft, with nearly $40 billion in revenues, is nearly ten times the size of Google. It has $34 billion in cash, generating $1 billion in new cash a month. Microsoft still remains and will remain as the number 1 software company in the world.