Emergic: May 7, 2005 Archives

Saturday, May 7, 2005

Microsoft vs Google

Fortune has a story on the classic challenge of today: Microsoft (Gates) vs Google.

Google has become a new kind of foe, and that's what has Gates so riled. It has combined software innovation with a brand-new Internet business model—and it wounds Gates' pride that he didn't get there first. Since Google doesn't sell its search products (it makes its money from the ads that accompany its search results), Microsoft can't muscle it out of the marketplace the way it did rivals like Netscape. But what really bothers Gates is that Google is gaining the ability to attack the very core of Microsoft's franchise—control over what users do first when they turn on their computers.

Inside Microsoft, the battle with Google has become far more than a fight over search: It's a certifiable grudge match for king of the hill in high tech. "Google is interesting not just because of web search, but because they're going to try to take that and use it to get into other parts of software," says Gates as he leans forward in his chair, his body coiled as if he could spring to his feet at any second. "If all there was was search, you really shouldn't care so much about it. It's because they are a software company," he says. "In that sense," he adds later, "they are more like us than anyone else we have ever competed with."

Microsoft | PermaLink | Comments (3)

This might be off-topic but:
As I see it, the most interesting thing that Google has done so far is to break a computing task into manageable pieces so as to give it to their thousands of low end computers to process in parallel. They do this with brilliant perfection for searches. Ever wondered why Google results show up faster than searching your local desktop for a file? This breaking up of a computing task is not only limited to search. Do you think that Google has some high end multi-proc server for their internal payroll or computing Adsense revenues? I am sure they use the vast power of their distributed infrastructure to compute this stuff as well.

Its just a matter of time before they let others tap into this raw power of their massively distributed infrastructure for an end-users computing tasks. Google has so far done a good job (technically) of making some of the applications being accessible through a browser interface. Case in point: Gmail, Blogger, Google Maps. The real problem of Microsoft, it seems, is they might end up making the PC irrelevant. (not that the PC is going away or anything, just that it will become a less of a 'must have' thing going forward).

Posted by Anand Jain

As I see it one of the more “threatening” issues for Microsoft has to deal with is Google’s desktop search feature. As I’m sure you are all familiar with, it searches the content as well as the names of emails in outlook, previous web history, computer files, etc. etc. As a result Microsoft will be including a similar search technology in their newest release of windows. That is where I believe that Microsoft feels threatened.

Microsoft has given us the ability to create of all this information- Google has empowered us to organize and use it efficiently.

To another point- one worthy of further discussion- Google is quite young. With around 3,000 employees and rapid global growth, they spend an enormous amount of time in the “lab” so to speak. They spit out ideas, products and tools faster than any other company today. They can aquire and merge (i.e. Keyhole) with ease and effiency. No lawsuits. No infringements. The question is can they stand the test of time? Microsoft was young and dominant at one time as well. In their own rights Oracle, 3M, IBM were the same way.

I know it may not be fair to compare the Google to these just yet- but it has to make a decision on how it grow; Can it support itself on search technologies and ad revenues alone?

I’ve included excerpts from the Google prospectus that addressed some of the questions posed:

“Both Microsoft and Yahoo have more employees than we do (in Microsoft’s case, currently more than 20 times as many). Microsoft also has significantly more cash resources than we do. Both of these companies also have longer operating histories and more established relationships with customers. They can use their experience and resources against us in a variety of competitive ways, including by making acquisitions, investing more aggressively in research and development and competing more aggressively for advertisers and web sites. Microsoft and Yahoo also may have a greater ability to attract and retain users than we do because they operate Internet portals with a broad range of products and services. If Microsoft or Yahoo are successful in providing similar or better web search results compared to ours or leverage their platforms to make their web search services easier to access than ours, we could experience a significant decline in user traffic. Any such decline in traffic could negatively affect our revenues.”

(part 1)

-Soam

Posted by Soam Lall

(part 2)

Furthermore on the topic of "Google growth" they continue:

“Our business and operations are experiencing rapid growth. If we fail to effectively manage our growth, our business and operating results could be harmed and we may have to incur significant expenditures to address the additional operational and control requirements of this growth.

We have experienced, and continue to experience, rapid growth in our headcount and operations, which has placed, and will continue to place, significant demands on our management, operational and financial infrastructure. If we do not effectively manage our growth, the quality of our products and services could suffer, which could negatively affect our brand and operating results. To effectively manage this growth, we will need to continue to improve our operational, financial and management controls and our reporting systems and procedures. These systems enhancements and improvements will require significant capital expenditures and allocation of valuable management resources. If the improvements are not implemented successfully, our ability to manage our growth will be impaired and we may have to make significant additional expenditures to address these issues, which could harm our financial position. The required improvements include:

•Enhancing our information and communication systems to ensure that our offices around the world are well coordinated and that we can effectively communicate with our growing base of users, advertisers and Google Network members.

•Enhancing systems of internal controls to ensure timely and accurate reporting of all of our operations.

•Documenting all of our information technology systems and our business processes for our ad systems and our billing systems.

•Improving our information technology infrastructure to maintain the effectiveness of our search systems."

Hope you found this informative. Sorry for the length. Feel free to let me know your thoughts….
-Soam

Posted by Soam Lall

Selling to the Poor

Red Herring writes:

“There are five billion people in developing countries that are currently underserved, but can’t wait to join the global economy,” says Coimbatore Krishnarao Prahalad, a University of Michigan professor and author of best-selling business books, including The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits.

Consumers “at the bottom of the pyramid”—as Mr. Prahalad refers to the poor—can’t afford the same products as Western consumers. On average, they earn less than $2 per day. Mr. Prahalad, considered one of the world’s most influential business thinkers, believes companies can make a profit targeting this market, if they make their advanced technology affordable.

First, price/performance ratios need to improve by a factor of 30 to 100, he says. “But contrary to popular belief, there is more to it than just taking existing technology and removing some functionality,” he says. “Products for developing countries often have to be more advanced than those for the developed world.”

How can one sell more advanced products at lower prices and still make money? “Through innovation,” says Mr. Prahalad. The $39 you pay for a DVD player that was made in China isn’t all about low labor costs, he says. It is about doing things differently.

“In India, car manufacturers such as Tata and Hyundai sell cars for $7,000—for $9,000 you have a car with a video screen in the back seat and the quality is high,” says Mr. Prahalad. “Why do we sell cars in the U.S. and Europe for $20,000?”

India is proving to be a popular testing ground for new, affordable products in a variety of fields, including artificial limbs and disposable razors.

Emerging Markets | PermaLink | Comments (0)

Apple's Tiger

Walter Mossberg gives it an excellent review:

Overall, Tiger is the best and most advanced personal computer operating system on the market, despite a few drawbacks. It leaves Windows XP in the dust.

It also adds to the Mac's general superiority over typical Windows computers as the best choice for average consumers doing the most common computing tasks. Apple's hardware already was the best in the business, and Mac OS X has, so far, escaped the virus and spyware problems that plague Windows.

Software | PermaLink | Comments (0)