I give Microsoft a better chance of toppling Google's dominance in search than I give Google of toppling Microsoft's dominance in the OS arena. Both companies are going after the other's bread and butter, but Bing is an actual product that is taking market share away now, and Steve Ballmer has committed $4-5 billion over the next few years to improving Bing and going after Google. Chrome is an anouncement not yet a product.
Second, both companies have a lot of money and both companies hire the best and the brightest in the industry. But Microsoft is in the top 10 on Fotune's list of most profitable companies. They made $17 billion in profit last year. They have the resources to fend off any of Google's attacks on their OS while still funding their attack on Google's search dominance.
Google is still a one-trick pony, whereas Microsoft is more diversified. It seems to me that Google is the more vulnerable of the two.
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Google’s Bid to Shatter Windows
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Today, it's netbooks that are the darling of the PC industry, though they represent only a fraction of total sales. Worldwide shipments of the lightweight devices are up 68.5 percent in 2009, while overall PC shipments are expected to fall by 9.5 percent, according to the market-research firm iSuppli. The same firm forecasts that 22 million netbooks will be sold this year, compared with a total of 134 million PCs. One possible bottleneck in the growth of the netbook market in the United States is a wireless Internet infrastructure. "What you need, and what the market is missing right now, is ubiquitous connectivity," says Richard Shim, an analyst at IDC. Although Google's Chrome browser has offline features, the point of the operating system—and netbooks in general—is to be online all the time. Wireless carriers will likely need to develop more flexible billing plans for data access—like daily or monthly options—and make sure their networks can handle a surge in traffic.
As Google bids to become a greater part of Web surfers' lives—from a little box on a Web page to the guts of the machine itself—it has in its favor a massive reservoir of cash, talent, and (privacy concerns notwithstanding) good will on the part of users. What's more, Google is betting on a future in which computing is decentralized, where users' data and applications reside in the "cloud"—servers accessible from anywhere. Microsoft is largely dependent on centralized computing and its cash cows—the bulky Windows operating system and the Office suite of local applications. Most of the innovation is headed in Google's direction, and the consequences could very well blow up Microsoft's dominance of how users interact with PCs. But the fuse will be long to burn.
With reporting by Nancy Cook
© 2009
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