Bill
Gates is blowing smoke at Google again. Twice this week Gates has
said nasty things about Google. Yesterday he was sounding sort
of high-school churlish with his statement, "Google is still
perfect; the bubble is floating, and they can do everything. You
should buy their stöck at any price. We had a 10-year period just
like that." Earlier today, he and his buddy, lil' Stevie
Ballmer, sounded like they were playing king-of-the-castle at recess
when he predicted that Google was going to be dethroned because the
other kids will want to play with new-tech toys that Microsoft has,
but Google doesn't.
Bill Gates is not a man who likes to play catch-up. Being the
world's wealthiest person and running the most lucrative corporation
that has ever existed, he is not often in a position where he feels
behind anyone's eight-ball. One can only imagine the frustration he
must feel when he thinks about Google and the threat they pose to
his empire.
As everyone knows, Gates' empire, Microsoft is enormous. With the
copyright over the operating systems and business software used on
the vast majority of personal and business computers around the
world, Microsoft has long used that advantage to dictate how things
would be done. Over the past 30 years, Gates has seen Microsoft's
revenues grow from the $16,005 they made with 3 employees in 1975 to
the $36,840,000,000 they made with 57,086 employees in 2004. For the
most part Microsoft has concentrated its energies on developing the
software that runs personal computers, web servers, mobile phones,
vehicle components, and much of the global digital infrastructure.
Riding the strength of IBM's reputation Microsoft was established
as the predominant maker of operating systems and operating system
accessories by the mid 90's. A short and brutal period in the early
to mid-90's marked the point Microsoft understood the importance of
the Internet. An upstart company named Netscape Communications had
created a web browser that was not only better than Microsoft's
Internet Explorer; it was being given away for frëe. This was in
the first few years of the commercial Internet and Gates correctly
sensed the importance of controlling how people view information
found on the Net. Through a strategy of bundling a frëe browser
into the Windows OS and providing tools that would create
non-Netscape friendly code, Gates managed to seize significant parts
of the browser market back from Netscape. Netscape was forced to
sell itself and its technologies to AOL which later introduced the
nail in Netscape's coffin, the terrible AOL-heavy Netscape 6.0.
Even with AOL's unwitting assistance, establishing control of the
global digital environment was hard work. Over the thousands of
person-years of programming, many a mortal soul was invested in
producing that outcome. Whatever anyone says about the darker nature
of Microsoft's monopoly and corporate business practices, Gate's
obsessive interest and passion for IT drives his thinking. One just
has to accept that a big part of the thought process involves
further ingraining Microsoft's control over the IT environment, as
it has for the past 30-years. What he missed, as he elegantly
admitted at the January 2004 World Economic Forum meeting in Davos,
Switzerland, was how important finding information on the internet
was going to be. Another upstart rose to become king of the only
castle that made sense of the Internet for average users, search.
"Frankly, Google kicked our butts...", said Gates in an
interview in Davos. Imagine how he must have felt the day he
realized the foundation of his empire had to be supported by the
shifting sands of search.
Since at least December 2003, Gates has sensed a shift in the
sands of fortune. He was already working on plans to deal with
Google's dominance over the search market but while spying around on
their website, he noticed that Google was hiring software engineers
with qualifications that had little to do with search. Google was
(and still is) hiring operating system designers, systems
architects, email specialists, and other IT engineers who could
easily fit into one of many of Microsoft's divisions. Everything
about the Google Job Opportunities page screamed to him
"INTRUDER ALERT". The day is practically legendary in
Internet history. Apparently he was more than a little annoyed and
after firing off a warning email to key executives, he has spent
much of the past year in a public pique over Google's continued
growth.
The growth and nature of the Internet has allowed serious rivals
to emerge. Before the mid 90's, Microsoft could be reasonably
certain it fully controlled the operating environment by controlling
the delivery system. By controlling the means of delivery, Microsoft
could control the software Internet users used. Software bundled
into the Windows operating system became the standard used around
the world because it was instantly accessible and guaranteed to work
with Windows at least 99% of the time. When upstart competitors
popped up, Microsoft was generally able to limit their market
penetration by simply being there. Gates has good reason to worry.
Today, Microsoft faces a host of challenges. The open source
movement has propelled development of literally thousands of
variations of the Linux OS. Internet users can download a variety of
applications that work on multiple operating systems as well as the
Windows OS. Microsoft no longer controls the means of information
delivery in the way it once did and it no longer can. Their major
attempt at dictating a standard information infrastructure of the
Internet, the massive .Net project has likely been shelved at least
according to speculation at Slashdot.
The forum conversation was brought to me by my very own personalized
Google homepage incidentally.
Microsoft actually has a plan to deal with Google. It is in
development and code-named Longhorn. Longhorn is the long-awaited
Swiss-army knife operating system Microsoft has been hyping for
almost two years. With rumoured features such as desktop search and
a host of other Internet related tools, Google, Yahoo, Ask Jeeves
and several millïon open source developers have already made its
greatest offerings seem obsolete. Longhorn, in turn has been delayed
time and time again, forcing the cynical to speculate on why. My
personal favourite theory is they are swapping out the Solitaire
game and replacing it with a stripped down version of Duke Nukem
Forever. In reality, it appears Microsoft is actually far behind the
tech-curve race for the first time in its corporate existence.
The speed and stability of the Internet combined with vast
improvements in storage and file compression allows Google (and
other rivals) to offer server-side applications such as GMail,
Blogger and Google Earth. These applications are precursors to more
robust server-side applications and when presented by Google at
least, they are available at no-cost to users. Google has also used
the Internet to invade what used to be Microsoft's sacred space, the
desktops of individual users. This is especially troubling to Gates
as the desktop was the domain that Longhorn was supposed to rule.
The desktop has always been Microsoft's greatest asset.
In its history, Microsoft has been known to move heaven, earth
and entire corporate law divisions defending its turf and defending
against lawsuits stemming from stuff they did to defend their turf.
Google is a different sort of foe and after a decade of practice,
Internet users are better prepared to pick and choose which products
are useful to them and which are not. The days when a product line
could be protected with proprietary practices are long over. While
biggër than any other entity on the Net, Microsoft does not control
it and therefore no longer controls the means of delivery.
That's where search comes in. While the Internet is the primary
delivery vehicle, search engines provide the primary means of
finding the stuff that is being delivered, whatever that stuff might
be. Controlling search is the key to controlling Ecommerce and the
future of advertising. He who controls search gets richer than rich,
and that is why Mr. Gates thinks about Google so much of the time.
Google is not Microsoft's richest competitor. Sun, Apple and
Yahoo are. The thing that sets Sun, Apple and Yahoo apart from
Google is that Google has the most momentum and a hell of a lot of
available capital. It also has stöck values that rival those of the
late 90's. Google closed the day at $266 per share. Microsoft on the
other hand is sitting in the $26 per share range. While we all know
stöck values are hardly a measure of competence they are a measure
of available capital and currently, Google is enjoying more
cash-flow than they ever dreamed of.
For the vast majority of computer users around the world,
Microsoft's enduring legacy is seen in the generations of Windows
operating systems whose universal popularity created a standards
benchmark in software creation. Programmers had to design software
that would work with the Windows OS. Today, the Internet itself has
become a secondary universal operating system. That and the fact
that Google is synonymous with the Net's most important application;
search, puts Gates and the wizards of Redmond behind someone else's
eight-ball in one of the highest staked billiard games ever.
About
The Author
Jim Hedger is a writer, speaker and search engine marketing expert
based in Victoria BC. Jim writes and edits full-time for StepForth.
He has worked as an SEO for over 5 years and welcomes the opportunïty
to share his experience through interviews, articles and speaking
engagements. He can be reached at jimhedger@stepforth.com.
