Microsoft vs. Google

Rick Segal, a Venture Capitalist and popular blogger, The Post Money Value, has a thought provoking post today entitled 'Google vs. Microsoft (VC style). Rick does his homework and has a good sense of the trends. Take a look at what he has to say.

C/Net News has a story today about the battle between Microsoft and Google. "Tuesday morning, Microsoft Chairman Bill Gates and services chief Ray Ozzie are expected to outline the company's new push to offer myriad online services on top of its existing software lineup."

I believe Microsoft and Google are destined to compete for the hearts and minds of developers and users, and maybe someday enterprise customers.  I don't think it will be a head to head battle for a while since Microsoft and Google approach the market very differently.

I am reminded of a quote "In a fight between a grizzly bear and an alligator, the terrain determines the winner".  Meaning, each company has its strength and position in the market. The company that crosses over to fight on the others turf is likely to lose...but probably not die. These giants are too strong and too smart to battle to the death over any one market. It will be a battle for first place versus second place, with each making money in its own way.

My guess is this will be a battle of the titans fought on many different fronts for a very long time...like decades. This is great for customers and users. Innovation will flourish and prices will decline. Competition is a great thing.

Microsoft has already entered the battle for Search supremacy. MSN Search is awesome. In fact, it is hard to pick a winner in terms of relevance of results for any particular search. Internal to Microsoft we have a search site that simultaneously sends a search query to MSN Search and Google, and displays the results side by side. Internal users vote on which results were more relevant. This feedback helps us tweak the ranking and relevance algorithm. I was director of engineering at AltaVista so I have a real appreciation for search. I have got to tell you that I think MSN Search is equal to, or better than Google. Now it is a matter of gaining user market share and building out the Ad Network revenue model.

Microsoft also has Virtual Earth a mapping service that competes with Google Earth. Microsoft is likely to move towards a web service based model for a select few traditional client software products. Google may enter this space as well.

The competition will be interesting. Each company will strive to protect its base products and revenue streams while innovating with new products and business models. The parrying back and forth will be a battle of strategic business decisions and technical brilliance.

The stock market likes to pick winners and losers. Both companies are winners, and will continue to be. It is simply a battle for first or second place in lots of different markets. The real danger is to entrepreneurs who play in the same space. There are two good outcomes (IPO or acquisition) and two bad ones (mediocrity of the walking dead, and total destruction). Entrepreneurs should make sure they have a solid strategy on how to partner or compete with Microsoft and Google.

If you want to partner with Microsoft, the Emerging Business Team is here to help.

Comments

[Mike]

The battle between Microsoft vs Google is very interesting. Micosoft needs big step in new appllication field, not just continuing update versions(that is important, but not essential). Like iPod, brings new ideas.
To help others to compare MSN search, Google or other search engine,in real time, Tablane browser bring you Multi-Engine search side by side. You can easily change search engines.

In search field, MSN search should also focus on special field search. If you can not beat Google in general search, you still have chance to win in individual category. Such as search for students. If users used to one search engine, they reluctantly change to another.