Opinion: Google vs. Microsoft Future, Both Companies Will Continue to Depend On Each Other

Posted Nov 8, 2007

“Google is not ahead of us.”
“In the area of search specifically, Google would lead.”

-Microsoft CEO, Steve Ballmer at a hotel in Tokyo, Japan

Everytime Google releases a new product, Microsoft is questioned about their strategies. Are the strategies aligned to make themselves more competitive against Google?  Personally, I think its getting old though.  As much as both companies deny it, they both seem to depend on each other too much and will continue to do so for a long time. 

Google Keeps Microsoft Fresh And On Their Feet
Google has a lot of money to play with and is using their internal talent pool to come up with ideas that differentiate themselves from the market. 

1.) Google action: GMail answered the problems with current online e-mail standards. 
2.) Microsoft response: Hotmail got a complete face-lift

1.) Google action: Google Earth developed after the company acquired Keyhole Inc. in 2004.
2.) Microsoft response: Windows Live Earth

1.) Google action: Google Maps
2.) Microsoft response: Windows Live Maps

1.) Google action: Blogger
2.) Microsoft response: Windows Live Spaces

Google No Choice But To Work With Microsoft Software. 
For almost every product Google makes, it has to work with a Microsoft product somehow.  For example, Internet Explorer 6.0 has the largest market-share for browsing the Internet today, so if Google Maps or Google Docs & Spreadsheets is not compatible with that browser, then they’ll lose millions of potential users. 

When the Google Maps application was developed for mobile devices, they have to work around Windows Mobile operating systems.  When Google Earth was released, the software had to be able to work on Microsoft Windows or else they’d have a shortage of downloads.

“You know how you survive?  You make people need you.  You survive because you make them need what you have and then they have nowhere else to go.”
-Bill Gates as portrayed in Pirates of Silicon Valley

Focus on Core Products
Microsoft revenues this year were boosted primarily this year due to Halo 3, Office 2007, and Windows Vista [source: Yahoo! News].  Text link advertising is clearly Google’s forté and will continue to be so for a long time.  Text link advertising is the base of Google’s revenue which in turn influences the stock price and market valuation that powers company ideas like GMail, Google Maps, and Google Docs & Spreadsheets.  This is something Microsoft cannot take away from them anytime soon.  But at the same time, Google cannot take away Microsoft’s market-share for operating systems, video games, and its Office suite anytime soon. 

Google and Microsoft constantly copy each others models is like sitting in a rocking chair: its a lot of fun at first, but it doesn’t get you anywhere. 

Google’s core focus is search.  The company must focus on how to make their search smarter than Windows Live so that they can continue to be the first to market.  Google search is smart enough to determine right away if you’re searching for people, local businesses, stock quotes, weather, currency exchange rates, and even doing calculator functions.  These are great features, but this can be easily matched.  Google’s focus should be on making search simply smarter.

Microsoft’s core focus is the operating system.  And it has been since Paul Allen bought DOS for $50,000.  Windows Vista didn’t get rave reviews because of its similarities to Apple’s operating system and because of its necessary hardware specifications.  Windows XP had a lot of success and people are finding it difficult to switch to Vista.

Both companies cannot afford to lose sight of their core services.