Saturday, October 16, 2004

Microsoft Reaching out to Google

So right now, Google is rekindling the fires of wicked competition in Microsoft. Microsoft's response to Google was the focus of questions and angst during the Microsoft Company Meeting. We recently held an MSN Search Champs evangelical NDA meeting to start sowing the seeds of nodding consensus for when we manage to start shipping our search solutions.

But what if we went and partnered with Google?

Or at least, stepped back, slapped them on their corporate butt, and said, "Alright then, go get 'em, Tiger! Tell us what you need."

I was ambling through the forest recently thinking about this, especially given Dare's comment to the Googl e Desktop post:

Responses like this is why Microsoft will continue to engage in misguided efforts. I don't see why the fact Google is actually fixing our crappy OS search feature is taken as competition instead of symbiosis. After the billions of dollars the company spent on IE (I'm including lawsuit payouts) does the fact that the Web browser most people use is named "Internet Explorer" not "Netscape Navigator" really make a multi-billion dollar difference our bottom line? Here we go again...

What if BillG called up the Google Boys and said, "Let's work together." Eh-yeah, I don't see that happening either. However, I know people who work at Google now (in the past few months especially!). You probably know folks who work there, too. Right now we're at a fork in the road as to how we'll respond to Google, and one way is to team up with them for something productive that will benefit our users big-time.

Should we take the reigns of this relationship into our own hands and say, "No!" to frenzied We-can-do-better-Now-that-we-see-What-we-must-do'ism? Do any of you remember the Marc Andreessen photocopies with his dork-ass quotes plastered around the IE hallways back in the 1990s? That "motivational" atmosphere wasn't too cool. Let's not repeat that. Great software is not forged out of pissed-off anger and fear.

I'm going to drop some emails off over the next few weeks, asking my Nooglers how Microsoft can do better to support Google and try to sow some different seeds.

(And all of this jives nicely with my deepest desire: one reason we can compete with such blood-thirsty frenzy right now is that we have way too many employees. Most are under-utilized in money loosing endeavors. But, when a building threat like this arises they are just resources repositioned with new competitive goals. If we had less people underutilized that were so easily redeployed, we would be a leaner, meaner, and smarter organization. We would also develop strategic alliances and not feel that Microsoft had to do it all in one big entangled, mediocre mess.)


Anonymous said...

The way I see it, Google is only a competitor from a Windows- or Web-application standpoint. All Microsoft has to do is build a better tool for Search.

But if you want to look at them from a more strategic standpoint, I think you should look at them as more of a threat.

If you subscribe to the George W. Bush-theory of leadership, it would take no stretch of imagination to see they want to dominate the desktop. That means Microsoft must not let them get a foot into the door. The key element of the Bush-leadership example is to make a pre-emptive strike based on 'intent'.

So, you could work with them and help them build a superior search tool. Or you do let them do the heavy lifting by themselves and spend their own money towards meeting that objective.

So, you have to ask yourself: what are Google's intentions?

Are they going to be happy with nothing more that the better Windows- or Web-search tool? Or are they trying to replace Windows as the dominant Information Management tool?

Anonymous said...

It amazes me that people are worried about search again. This happend in the mid 90's when Yahoo went public and it is happening now. Google is not competition for MS because they don't build apps. Please tell me how build a company on searching is going to make you profitable in the long run. What are they going to do 2 years from now. Just because a company can build a search engine does not mean they can build an OS or build Office productivity products. The real threat to MS is free productivity software. Unless MS can create software that adds value there is no reason for anyone to buy it if they can download Open Office.

Anonymous said...

This is Robert Scoble.

I ran into Eric Schmidt, CEO of Google, today. Seriously. I gave him my business card and a "9 Guy."

He gave me the cold shoulder in return.

It's hard to even think creatively when the execs don't even want to engage in a conversation.

Anonymous said...

Scoble here again.

Google isn't building software? Oh, really? What do you call their desktop search? Their toolbar? Picasa? And other things coming soon?

Anonymous said...

Maybe Eric Schmidt didn't realize that Scoble is the Saviour of Microsoft.

Alternatively, maybe Schmidt doesn't want his strategies blasted all over the blogosphere.

He would probably talk to someone who mattered, though.

Anonymous said...

> Google Desktop Search can help you find web pages
> you've previously seen, email you've sent or
> received, IM chats, and files on your computer

Maybe I'm in the minority here when I say this but I really don't have any value for this? Or am I missing the big picture?

Anonymous said...

What on earth makes you think that Microsoft hasn't approached Google and offered to bend over backwards to help them out? Like, every year since 1999?

Anonymous said...

Google's intent? It's very obvious from their mission statement: "Google's mission is to organize the world's information and make it universally accessible and useful."

IMHO, while Google focused on its vision and figured out a way to make money at it, Microsoft has been on blinders trying to increase the monetonization of its monopoly on software that people use to create content. What Microsoft didn't realize (or just couldn't figure out a way to monetize) was how much people needed to organize and search for content, and I mean more than just e-mails or files. Now, with Google's apparent success, Microsoft wants to get a (big) piece of the action. Yup, very typical of Microsft as history has proven many times over.

Google has no intentions of displacing Microsoft for the businesses that Microsoft is in today, but Google's success will prevent Microsoft from growing into other areas. Again, IMHO, Microsoft is making Google a competitor much more so than the other way around.

Still, I believe that Microsoft has a very good chance of catching up and eventually surpassing Google because creating content and searching for content are two halves of a virtuous cycle/circle. To win, Microsoft must do a great job at integrating search into all of its apps (i.e. by providing it as part of the O.S. as its rumored to be the case in Longhorn) and making search extremely usable and intuitive.

Lawrence Liu

Anonymous said...

Coincidentally, re: my comparision of Google and Microsoft, this Infoworld article, "The Magic of Software" by Bill Gates should make it very clear (no matter how much you dislike Microsoft or love Google) that no other company in the world is investing as much as Microsoft in building software that will have a meaningful impact in the world.

Lawrence Liu

Anonymous said...

It's "losing" not "loosing". How many times a day do I come across my fellow 'softies who use "loosing" when they mean "losing" as in if you play fast and loose with spelling you will surely lose?

A typo? Perhaps. But I see this at least once per day at Microsoft and it's driving me crazy.

me said...

As a non-microsoftie, I have one comment -- what if Google *don't want* to partner with MS? IMO, history shows that a company having MS as a partner is best avoided wherever possible; they'll look pleasant enough, but quietly eat your lunch when you're not looking.

If I was Google, I'd be pretty sure that MS sees Google as a threat, and becoming "partners" could easily just be a way to tie them up while MS chows down.

Anonymous said...

Scoble answers:

>He would probably talk to someone who mattered, though.

Um, doesn't sound like you really understand how partnering is done. Yeah, the management have to buy into it, but so do the people who "don't matter." Why? Cause they are the ones who actually do the work.

Come over to building 20 sometime (where we meet with partners). Most of the people you see on both sides of the fence are the "unimportant ones."

Anonymous said...

Scoble answers:

Justin: partnering is a business decision. You should always sit down, have some beers, and see if there's a way to find a win-win partnership. If not, you walk away from the table after shaking hands. There are many examples of great partnerships, even with Microsoft.

>Alternatively, maybe Schmidt doesn't want his strategies blasted all over the blogosphere.

If someone asks me to keep their name or conversation off of the blog, I honor that. I have hundreds of secrets that I haven't leaked out to anyone.

Anonymous said...

Just installed the Google desktop engine. Totally cool.

Anonymous said...

I think Microsoft has to worry about Google's intentions here. Many want to know what the revenue potential was for a product such as Picassa. Personally, I believe it was a quick buy to push Google into the desktop software arena with a friendly shove.

I have a feeling that Google will be aiming at making software with high usability standards and friendly interfaces. This is where even Microsoft can be lacking. Honestly, I feel that Google has the potential to push out a new web browser and have it make an impact on IE. Although IE has a stronghold on the market, software from google gets immediate strong exposure, and don't forget Google fanatics' loyalty. As I said before, I feel Google has the power to do damage to Microsoft's desktop monopoly, however I doubt they will considerably harm anything of Microsoft's.

Anonymous said...

microsoft has lost touch with the end user...burn, baby burn.


Anonymous said...

Wow, you really need to see FIREFOX. This thing is way faster than Internet Explorer. It even has a Google search bar built right in!

Anonymous said...

Google Rekindling the Microsoft Fire

Google … The All Powerful Microsoft Killer … Tell us it ain't true Bill. The revenue growth, the huge profits and great new products like Desktop Search have created a buzz like the Internet has not seen since Marc Andreesen stumbled upon Netscape.

Is Google really a threat to Microsoft? What products and services will Google release over the next 3 years? Will Microsoft, in the end, become the Google killer? Please give us your thoughts in the WebProWorld forum.

We're seeing worried ramblings, albeit interesting ones, like this from a Microsoft connected blogger, "What if BillG called up the Google Boys and said, 'Let's work together.' Eh-yeah, I don't see that happening either. …Right now we're at a fork in the road as to how we'll respond to Google, and one way is to team up with them for something productive that will benefit our users big-time."

The Microsoft blogger noted that big MS has Google on its mind, "So right now, Google is rekindling the fires of wicked competition in Microsoft. Microsoft's response to Google was the focus of questions and angst during the Microsoft Company Meeting." Doesn't it seem strange that Microsoft with its immense resources, experience and marketing power is this concerned about Google?

Google playing the Microsoft game.

Google is copying the Microsoft competition model and Bill Gates knows it. Probably most disconcerting to Bill is that Google is nicely positioning itself to eventually take over the desktop.

Step 1: Create a massive monopoly by building a superior product, which of course Google has done with Internet searching. Google has trounced its search competitors to the point that no one cares if they exist. Of course, Google also needed a business model … and they luckily found one over at, now known as Overture and owned by rival Yahoo.

Step 2: Leverage the monopoly by launching products and services that compete with your competitors thus extending your power and reach.

Step 3: Repeat step 1 and make powerful monopolies centered on each of the new products and services. Of course, Google is just getting started with their new products like Gmail, but just wait …

Google vs. Microsoft, Yahoo, AOL.

The in your face competitive nature of Google must be daunting to Microsoft, Yahoo, AOL and others who have or who are about to face competition from big G. Following the success of the original Google search engine they have launched; a major news portal (competes with Yahoo and MSN), a shopping portal (makes eBay nervous), internal book searching (scares Amazon … because who knows if selling books is next), web mail (HotMail and YahooMail are frantic with the 1 gig storage issue), puchased Blogger (which has altered internet communication) and recently made available desktop search software (first direct hit at MS Windows).

They may be about to launch IM (will hurt AOL and Microsoft) and a web browser (remember Netscape Mr. Gates). They have even purchased the domain!

Of course Microsoft is in this fight for the long haul, "MSN is making significant investments in search, and we will ship the product when we are confident it will meet the needs of our customers," a Microsoft spokesperson said. The company plans to release betas of the new algorithmic search engine and desktop search in the U.S. by the end of 2004."

However, tech expert Steve Gillmor pegs Google with the advantage, "Microsoft's strategic errors with Internet Explorer and Outlook have created an opening big enough for a well-funded tank like Google to rumble through".

What's next for Google?

So what's next for Google beyond all of this? There is speculation that Google will develop a streamlined OS that will hit Microsoft where it hurts … Windows. Others expect Google to go after Microsoft Word and their other major business applications. If they can succeed then the Google dream may be worth as much or more than the Microsoft reality.

If you haven't tried Google Desktop Search you should… it really sums up this story. It makes you wonder why deep pocket Microsoft couldn't make a desktop search tool that works in seconds and feels just like Google's web search … fast, efficient and just about perfect.

MattyDread said...

Another commentor wrote:
"So, you have to ask yourself: what are Google's intentions? Are they going to be happy with nothing more that the better Windows- or Web-search tool? Or are they trying to replace Windows as the dominant Information Management tool?"

At a P/E ratio of something like 225 (today), Google damn well better be thinking of something beyond search. Even if Net advertising revenues increase six-fold, as MSN folks think they're likely to do (Internet spend is only 2% of overall ad spend; users spend 12% of their time online, so there's upside there), and even if Google captures more than its share of this increase, so what? They're sure as hell not going to increase future earnings to the point that justifies this kind of ratio!

Desktop software, maybe. But I suspect they're really banking on ubiquitous broadband and planning on launching a bunch of hosted services, along the lines of Gmail but with a much broader range of functionality. Store your digital media files online, access them from any device. Access productivity applications from any device. In other words, the HailStorm end-user scenarios without the ass-backwards HailStorm platformization/network of partners business model.

That's a threat. Ten years down the road, who'll need a new PC when you can do all this stuff simply by accessing a bunch of services via Google. Sort of the AOL threat all over again.

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