Google vs. Microsoft

An article from biz (Interactive English Magazine for Business) is very interesting. Here is the original. Take a look.

Sep 2005 No. 21 Google vs. Microsoft: Who's the Underdog?

「His company generates $40 billion in revenue each year, and he's amassed a $34 billion corporate war chest that increases $1 billion every month. His core business is growing 15 percent a year with operating margins above 30 percent. His name is Bill Gates, and despite Microsoft's impressive figures, hi's worried.

The source of Gate's concern is Google, and not because the search engine's name can be used as a verb unlike Microsoft. Gates is riled becasue Google's lucrative and revenue-driven Internet business model means Microsoft can't crush it in a price war; all of Google's products are free.

Gates is also mad because Google has hired more than one hundred former Microsoft software developers. Prior to the much hyped Google IPO, many thought greed was causing the brain drain. But as the exodus continues, it is clear that Google is just the hot place for young engineers to work.

What really steams Gates is this: Google is taking control of what people, including many Microsoft employees, do first when they boot up. From Internet and desktop search to Gmail, to the lauded Picasa photo software, to Blogger, people are "Googling"in one way or another after turning on their computers.

Gates, of course, is trying to change that. He invested $150 million dollars in a search engine, code named Underdog. However, it suffered through delays and, when it finally came out, failed to make much of a dent in market share. Microsoft also dropped the ball on desktop search, launching its version two months behind Google's.

Being slow-footed has cost Microsoft big time. Targeted online advertising is a five billion dollar a year market that is growing 40 percent annually. But no matter what it does, Microsoft can't seem to tap into it like Google has.

By all appearances, Gates has good reason to worry. Google's products are hip, free, and better than Microsoft's , making the company the darling of the industry. And if that isn't enought, Microsoft is also fighting off challenges to Windows by Linux; it can't touch Apple in online music; and the Firefox browser is chipping away at Explorer's market share.

But appearances can be deceiving. Historically, Microsoft hasn't been the leading innovator in the industry. It has, however, always followed fast and ultimately found the best solution. Just ask Netscape, WordPerfect, Lotus, and Novell.

Unable to attack Google's business model, Microsoft will have to find a way to out-innovate its new nemesis. Producing a search engine that understands context is one way. So is making premium content, such as Wall Street Journal archives, searchable. This will take money-lots and lots of money. And Gates, clearly not one used to losing, may be willing to spend it.」

Humm, really interesting. I'm using Blogger now! Maybe many other people use Gmail every day, and like to use its search engine to find what they need to know. Google indeed has taken a place while many of us are unconsciously using its products.