It’s all about advertising! No, it’s applications! No, search is king! No, think new media! No, it’s about freedom and competition!
With such high stakes, $40 billion or so, who’s counting, no wonder the BS flies. The Microsoft propaganda staffel is in full battle order led by their usual henchmen and women at Waggener Erdstrom. See their Corporate motto: You innovate. We communicate. Give your PR career a voice today.
The reality is more like: You innovate, we help Microsoft crush you. So, these days, Microsoft plays the aggrieved party, the friend of free market competition selflessly warning us of the danger of Google’s monopoly. Chutzpah aside, they have a point. Google enjoys a dominant position, no dirty tricks involved as in Microsoft’s adjudicated cases, but problematic nonetheless. Microsoft’s next point is a smoke screen: It’s the advertising market we’re interested in. No, we’re afraid of losing the gigantic profits of desktop applications and Windows licenses. In 1994, we all (yours truly included) dismissed Marc Andreessen’s “The Browser Is The Operating System”. All of us but one, Microsoft. Bill Gates promptly added one word: In. As in “The Browser Is In The OS”. Netscape died. Not quite, Firefox should be called Phoenix. Firefox, based on parts of the old Netscape, runs on Linux, Macintosh and Windows. And Google Apps run on browsers, Firefox, Safari and Microsoft’s Explorer. Google Apps aren’t yet and probably never will achieve the same “rich” set of features available with Microsoft Office. So rich we call it bloatware, obese software that more and more gets in the way of getting most things done.

The result?
We’ll always need an operating system of sorts, that’s not the debate. But combinations of Web-based applications such as Google Apps with browsers such as Firefox make the OS argument less relevant. As discussed last week, this is what Microsoft directors see, this is the threat to the real billions, the Windows and Microsoft earnings stream.
But, yes, it is about advertising, really. Not advertising in itself, but advertising as the source of Goggle wealth. What Microsoft would like to do is cut that oxygen, cut Google’s ability to invest their advertising profits into their server farms, their software development, their ability to build the foundation for businesses that threaten Microsoft’s only interesting profit engine: Windows + Office.
With this in mind, things are, I hope, a little clearer.

But what about Search?
A friend of mine at a noble and worthy (and possibly suffering) US business daily newspaper writes, rather convincingly: Google is a brand. He means there is no objective difference between search results at Ask, Yahoo, Live.com (Microsoft) and Google. I beg to differ, they do differ in two ways.

First, in my admittedly unscientific tests, Google gives me better results, more often and closer to the top of the list. Yes, everyone clones the uncluttered Google look, but Microsoft and Ask sometimes completely fail to yield useful results.

Second, Google provides a richer set of functions around search and does this in a fairly discreet fashion. As we say here, YMMV, Your Mileage May Vary, a way to say I realize what I state here is hotly debated. Anecdotal as my position might be, I’ve seen steady improvements in Google’s search. Refinements here, better results at the top there, nothing striking but more than enough to strengthen Google’s lead position. The dog keeps coming back to that dog food, even after trying other brands.
Again, what Ballmer and the Microsoft Board seem to say is this: Search leads to advertising leads to money leads to investments against our Divine Windows and Applications profits. We failed to do anything of value in search and in advertising. We haven’t done much with a confusing (dis)array of so called Live Web applications. Buying Yahoo! at least help us gain combined search and advertising revenue, thus cutting Google’s ability to compete with our traditional business.
Still, many of us here in the Valley fail to see how the two companies can combine their people and business units. Microsoft, with all its money and competent engineers keeps failing to make any gains on Google’s ground. Why? Could it be Microsoft chose to develop very large scale server farms on its own product, Windows Server? That product is excellent in Enterprise applications, well-understood by many, supported by tools, reasonably easy to deploy with a good UI (User Interface). But, it is utterly unable to “scale” (in English: grow) and support hundreds of thousands of interconnected servers. Think of the human skeleton, it can’t support heights much beyond 7 feet. The weight grows with the cube of dimensions, the bone load-bearing grows with the square of it diameter. The same old architecture reaches an unbreakable limit. Today’s gigafarms are at the edge of computer technology and Microsoft is shackled to its past while Google is free to pick and design whatever fits its future. Google has no architecture or applications past.

Speaking of past, AOL is for sale. Netscape was sold to AOL, late 1998, for $4 billion, soon to become $10 billion by the time the announced transaction became reality. In 2000, AOL bought Time Warner in the biggest merger of all times, $182 billion in stock and debt. Things went downhill from there, the synergies, the media conglomerate, the portal to end all portals, the hypergalactic infotainment and edutainment (a despicable concept and conceit) center never worked. Now, finally, AOL is “freed”. Is this the future for MicroHoo ?

–JLG

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