Google Versus Microsoft
Who will win? Google certainly has impressive assets. Moreover, Microsoft does not own the server side of the Web and probably never will. Nor does it control the architectures of the newer computing platforms, whose markets are growing much faster than the PC’s. And in these newer markets, Microsoft faces a painful choice: either provide search technology that will run on, and thereby support, competing platforms such as Linux machines, or let others take the lead.
Yet Microsoft’s control of Windows, Internet Explorer, and Office is a real advantage. For instance, if desktop search tools enjoyed deeper access to the internal document structures of Word and Excel, they would be much more useful. Similarly, operating systems can potentially collect information about user behavior that could improve search tools substantially. Other recent search innovations are really enhancements to the Web browser. Google, Ask Jeeves, A9, Blinkx, Yahoo, and Microsoft are all providing search toolbars that can be downloaded into the browser, and independent developers have created many search-related enhancements to the open-source Firefox browser.
But we know who really owns the browser. Ramez Naam, group program manager for MSN Search, declined to say whether or not search functions would be integrated directly into Microsoft’s Internet Explorer. But a Microsoft executive, who asked to remain unnamed, told me that his company had recently reconstituted its browser development organization. “Microsoft effectively disbanded the Internet Explorer group after killing Netscape,” he said. “But recently, they realized that Firefox was starting to gain share and that browser enhancements would be useful in the search market.” He agreed that if Microsoft got “hard-core” about search (as Bill Gates has promised), then, yes, Google would be in for a very rough time.
Why? Because in contrast to Microsoft, Google doesn’t yet control standards for any of the platforms on which this contest will be waged – not even for its own website. Although Google has released noncommercial APIs – which programmers may use for their own purposes, but not in commercial products – until recently, it avoided the creation of commercial APIs. In late 2004, however, Google announced APIs for its advertising systems and for the Google Deskbar. The advertising APIs could help create an infrastructure of firms dependent on Google’s platform and specializing in the management of automated, Web-based advertising strategies. This could protect Google’s advertising revenues against future price competition from Microsoft. The Google Deskbar APIs, likewise, should encourage third parties to create search functions for the Windows desktop.
These steps, however, are at best half-measures. Google has not yet faced the need for full architectural competition and in some respects has arguably been moving in the wrong direction. It still has not provided open APIs for its core search engine. (Raúl Valdes-Perez, Vivisimo’s CEO, says that he tried to license Google’s search engine services but was refused.) Furthermore, it sells its search software to enterprises only in the form of a bundled, Linux-based hardware system. This alienates other hardware and software vendors, leaves most of the non-Linux market unserved, and presents a huge opportunity for Microsoft.
Google may feel that APIs are of secondary importance in its coming war with Microsoft. Two Google employees (both of whom prefer not to be named) told me that Google’s leaders believe that the company’s expertise in infrastructure – knowing how to build and operate those 250,000 servers – constitutes a competitive advantage more important than APIs or standards. This could be a major, even fatal, error. Microsoft can certainly obtain or cultivate the skills necessary to operate large-scale computing infrastructures; indeed, it already operates MSN, with nearly 10 million users.
Worse, Google may feel that APIs can wait. Peter Norvig, the company’s director of search quality, told Technology Review, “We’ve had the API project for a few years now. Historically, it’s not been that important: it’s had one person, sometimes none. But we do think that this will be one important way to create additional search functions. Our mission is to make information available, and to that end we will create a search ecology. We know we need to provide a way for third parties to work with us. You’ll see us release APIs as they are needed.”
Those words do not convey much sense of urgency. There is, however, another possibility: Google understands that an architecture war is coming, but it wants to delay the battle. One Google executive told me that the company is well aware of the possibility of an all-out platform war with Microsoft. According to this executive, Google would like to avoid such a conflict for as long as possible and is therefore hesitant to provide APIs that would open up its core search engine services, which might be interpreted as an opening salvo. The release of APIs for the Google Deskbar may awaken Microsoft’s retaliatory instincts nonetheless. For Google to challenge Microsoft on the desktop before establishing a secure position on the Web or on enterprise servers could be unwise.