Microsoft dominated the desktop computer industry for the past 15 years with purported ruthlessness and cunning business savvy. These days? Don’t look now, but the role of the tech industry’s biggest bully and most dominant force is increasingly played by Google.
If you compete with Google, you’d better be looking over your shoulder. Its search engine algorithm alone can make or break a business.
From privacy issues to market dominance to passion among fans and detractors to government scrutiny, Google and Microsoft share more similarities than you may realize.
In 2005, Microsoft cofounder and CEO Bill Gates had this to say about Google: “They are more like us than anyone else we have ever competed with.” Far be it from me to argue with Bill Gates. Let’s take a look at just how similar these two technology megacompanies are.
1. Core Dominance
Google doesn’t have more than 90 percent of the search market, but there’s no question that the company rules the search world. Google had nearly 67 percent of the search market in December, according to Comscore; the closest competitor was Yahoo, at just 16 percent of U.S. searches.
Next: Monopoly Mania
2. Monopoly Mania
The downside of dominating an industry is that you’re an immediate target for antitrust allegations. Microsoft experienced this during the late 90s and early 2000s, with accusations of unfair business practices against competitors such as IBM, Real Networks, Gateway, Netscape, and Apple.
(See: “Microsoft Declared a Monopoly“)
Google’s antitrust headaches have just started, with European legislators looking into how it treats its search and online ad competitors. The company is also meeting fierce opposition from the online travel industry following its announcement of its intention to buy ITA Software, a flight-data aggregation company.
3. It’s the Platform, Stupid
The core strategy for both Microsoft and Google has been to create a platform that keeps the user in each company’s ecosystem. Microsoft led the way in the 1990s by distributing the most popular desktop operating system ever and offering tools that played nice with Windows, such as Microsoft Office, Internet Explorer, and early online “cloud-based” services like Hotmail.
In addition, it’s making a big push to popularize Web apps through its Chrome Web store and the forthcoming Web-focused Google Chrome OS. Google also recently stepped up its game in encouraging third-party development for its Android mobile operating system, with new features such as a Web-based store for browsing apps and an in-app payment system.
Microsoft faced little challenge to its ecosystem in the 1990s, while Google faces formidable challenges from Apple’s iOS platform for mobile devices and Facebook’s continuing push to become the dominant platform on the Web.
4. Apple Rivalry
Microsoft is the new IBM, Google is the new Microsoft, and Apple is the new…Apple?
Fast-forward to 2011, and Google is trying to beat Apple’s iPhone and iPad using a similar strategy: Although you will find iOS only on the iPhone and iPad, Android is on pretty much everything else, including devices from HTC, Motorola, Samsung, and Sony. Android’s smartphone market share is steadily overtaking that of iOS.
The most recent numbers from Nielsen say that new smartphone users are choosing Android devices over iPhones by nearly 15 percentage points, while the iPhone platform maintains an overall lead of about 3 percent. It hasn’t happened yet, but Android is threatening to push iOS devices into a niche market much as Microsoft shoved aside Apple’s Macintosh.
Next: From Rebel to Lumbering Giant
5. From Rebel to Lumbering Giant
Microsoft started out as the plucky disruptor that popularized the PC graphical user interface through wide distribution and lower pricing compared with Apple’s Macintosh OS. In a similar vein, Google was able to dominate search thanks to its amazingly relevant search results and its bare-bones homepage that featured the search box and nothing else.
But as each company has dominated its respective industry, each has had to deal with the transition from fast-moving startup to technology behemoth.
Microsoft was supposed to produce a slew of updates to its Windows Phone 7 devices in early 2011, but at the time of this writing it had yet to release even one update since introducing Windows Phone 7 in October. Google is trying to escape Microsoft’s fate by reinjecting a startup mentality into the company. Many observers believe that this is part of the reason Google is shaking up its management structure by removing Eric Schmidt as CEO in favor of Google cofounder Larry Page.
6. Trust Us
Believe it or not, Microsoft, not Google, was once seen as the big, scary technology company trying to steal your data. In 1999, Microsoft had to address suspicions that the National Security Agency had a backdoor into Windows that allowed the NSA to peek at users’ encrypted data. Then, in 2001, Microsoft revealed a big plan for its Passport universal sign-in feature, which would store each user’s name, password, address, e-mail address, and credit card credentials online to encourage people to shop on the Web. The Passport plan was met with fierce opposition, however, because no one wanted to trust Microsoft with their data.
Today, Google is dealing with all kinds of privacy concerns over Google Street View‘s taking pictures of people’s homes, Google’s recent Wi-Fi sniffing snafu, the company’s saving of search histories, the Google Buzz privacy breach, and on and on. And, oh yeah: Google has also had its fair share of accusations about dealings with the NSA.
7. Hooked on Googlesoft
Next: Competition Crusher
8. Competition Crusher
9. Me-Too Products
Google, meanwhile, has been desperate to get into the social networking game, with products such as Orkut and Google Buzz. Both have managed to grab only a niche audience. Whether it can compete against Apple’s Apple TV or Roku’s set-top box with its own Google TV remains to be seen.
(See: “Top 10 Google Flubs, Flops, and Failures“)
10. Brain Drain
(See: “Visual Tour: Visiting the Googleplex“)
Change is in the air now, though, and Google is steadily losing employees to the new “it” place to work: Facebook. Google Wave creator Lars Rasumussen and former Google exec turned Facebook COO Sheryl Sandberg are just two high-profile examples of people leaving Google for Facebook. Things have reportedly become so bad that Google is trying to retain its employees with bonuses and pay raises.
The tide appears to be turning in favor of Facebook. And that prompts one question: If Google is the new Microsoft, is Facebook the new Google?