The Google vs. Microsoft Cold War?
November 24, 2009 | Written by Yan Shikhvarger
I’ve been recently writing more and more about the topic of ‘search’ just because it seems to be getting more complex, influential, and interesting by the day. The latest big development is the potential shutting out of News Corp. content (Rupert Murdock) from Google with only exclusive access to Microsoft’s Bing. This would eventually raise the possibility of Reuters and AP doing the same thing as was hinted by Mark Cuban and become a battle for ‘news’ content.
What must be realized is that this is becoming bigger than ‘search’ and bigger than revenue drivers. This is not about Bing and Google Search. This seems like a long-term competition between two giants battling for position as the preferred technology brand for consumers. Both will use their core business to expand into other areas and it is important to analyze events and success outside of the ‘revenue’ lens.
This is now truly resembling beginnings of a technological Cold War. Much like in any long-term conflict, it is important view events with the big picture in mind. This is now a conflict of pre-emptive moves, territorial encroachments, tricky alliances, posturing, and battles for the ‘hearts and minds’ of consumers.
Let’s analyze the situation through the 3 ‘Cold War’ points mentioned above:
Encroachment
Google: Just announced its own browser based operating system, its office suite has been around for a while now, as well as its own browser. All areas that have been very important to Microsoft.
Microsoft: Bing is its major search initiative and encroachment into Google’s core area of expertise
Alliances
The potential news content (News Corp., and perhaps AP, Reuters) being available through Bing only is an interesting, yet tricky proposition. What is a definite outcome of such a deal is a huge loss of traffic for any property that excludes Google. According to Compete, Google holds 73% of the search market share. Excluding that traffic would obviously lead to lower page views and that is still the main monetization model of news sites. It would be interesting to see how much Microsoft is willing to offer news publishers to offset that.
This ‘blockade’ of Google can backfire quite easily because many news providers use AP and Reuters content such as The New York Times. So it seems that the content would still be accessible, just from a different destination.
Time will better judge this potential alliance/blockade but the initial thinking about its financial success is skeptical in terms of revenue, yet it may not be about that. This may be a step to deny Google their stated goal of indexing all of the world’s information.
Similarly, speculation of who will acquire Twitter in 2010 is something to watch (no matter what is currently said) and again this will not be about revenue generation much like Google’s purchase of YouTube. Twitter and YouTube’s monetization is far from proven as has been seen. So these are all big picture, defensive in nature moves and are not necessarily about revenue generation.
It seems that these are just skirmishes for what is ahead, and that is the battle for the ‘Hearts and Minds’ of consumers to become their preferred technology brand.
Although it seems that Google has an advantage because its product development model lets it release a multitude of diverse products that live in the ‘cloud’ (Gmail, Wave, Voice, Maps, Profile, Docs, Calendar, Reader, etc…), the flaw may be precisely in the way how these products are developed – by individual teams that seem to have difficulties integrating their products together. Few of the products come together in any meaningful away and Google will have to overcome that challenge.
Microsoft’s has the track record in creating integrated user experiences across various services, yet its challenge will remain in moving and monetizing their services and products in the ‘cloud.’
Much like during the Cold War when U.S. and U.S.S.R. battled over distant developing countries, achievements in space, and weapons races, similarly this technology conflict will take both companies into new places. Both will venture far and wide across many aspects of technology, so watch out mobile, music, GPS, telecoms, display ads, video, RFID, etc… This will be interesting, drawn out, high stakes, difficult to analyze, yet interesting.
Tags: Bing, Google, Microsoft, search
Comments (4)
November 24th, 2009 at 11:42 am Posted by Justin Buchbinder
The fact that this is even a discussion is so interesting to me. For the longest time Microsoft has been launching failed search engines. I could open a museum dedicated to their false starts.
But with Bing (okay, with Crispin Porter, let’s give credit where it is due) they may actually be on to something.
But Google is quick. Nimble. Not held down by a buggy OS and old-fashioned thinking and doing.
It all depends on if Microsoft will let Crispin Porter dictate how they do business. I hope they do. Because they are certainly on to something here.
And now with Bing and Google releasing updates every day to their engines, the war only benefits we web users, because competition in the market is ALWAYS a good thing.
JR
November 24th, 2009 at 7:47 pm Posted by David Spinks
It just seems to me like Microsoft is hanging by a thread. You get the feeling like bing is their last reach to grasp the rope and pull themselves back to relevancy.
Microsoft still fails to “get it” in so many ways. Bing seems to be their first step in the right direction.
If Microsoft wants to be a big player in this tech giant “cold war”, they need to really turn things on it its head and make some serious changes to their product line and their approach.
November 24th, 2009 at 8:25 pm Posted by vince jelenic
Shaping up to be an interesting “battle of the bitwits” ( no pun intended).
The web has always been a battle for control of “BITS”… it’s what the web is made of.
You are charged for internet access by bits, you download bits, share bits, and generally consume bits as your internet staple.
With storage and bandwitdth levels growing by leaps and bounds, it is ironic to find that the major players are reverting to what was an old tactic: figure out a way to charge per “bit”.
Monetiaztion of streams is coming, and it is quite possible that he who can maximize their monetization of even small bits wins. Perhaps Bing has done the math: 30% of the bits available at a 50% monetization rate is a very healthy margin indeed.
Have we gone full circle: Back in the 90′s charging for NEWS was laughed at — only a few industry stalwarts were allowed that luxury. News became free, or died. Now that we’ve all made our way to consuming bits — well the next step, of course, is getting charged for consumption. Nothing simpler.
An old colleague used to call Bell Canada the “troll at the gate” in the way it handled blocking and charging for traffic on it’s networks. Beware the troll, it has always been there…. just not so powerful as it soon will be.
Many people now spend as much between cell/phone/tv/cable/dish/internet/cellphones as against their habitation and more worldly physical needs. Given that trend, who can blame the big boys for wanting to own the streams. The danger here is, once you are in the “cloud” (known as SAS Software as service) you are truly reliant, and must be subservient to the troll at the gates.
Healthy competition may keep the trolls reasonable, or maybe not.
cheers.
Vince.
December 14th, 2009 at 12:05 am Posted by Michelle Ma
There are critical differences in the projected advancements.
First of all, Microsoft attracts many people with pennies and dimes. This contradicts the intentions of many better people who would not peddle their beloved ‘google’ for pennies and dimes.
Microsoft erects walls. The walls can become detached, unfocused, unmanageable.
In the very effort towards protection is the very carriage of corruption.
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