What Does Microsoft See in Google?
(Page 1 of 4 )
When the press got its hands on Microsoft CTO Ray Ozzie's memo in late October, most of them simply saw from it that Microsoft is gunning for Google, and that we might see ad-supported operating systems from the software giant in the future. There's a little more to the memo than that; SEOs may need to adjust to a future in which site optimization may have an expanded meaning.
Recently I wrote an article which suggested that, when it comes to competitive threats from the area of search engines, Microsoft might be wiser to focus on Yahoo! than Google. Of course, a few comments from one writer aren’t going to change the direction of a major software company (much as some of my esteemed colleagues might wish otherwise). That article did elicit a number of comments from readers, though, which inspired me to take a closer look.
Even if one remains convinced that the greater threat to Microsoft comes from Yahoo!, not Google, it’s instructive to consider why Microsoft thinks Google is the larger threat. One of my readers pointed to the fact that Google can raise lots of capital fairly quickly, and knows what to do with it. That can be very frightening for an established player like Microsoft. To quote my anonymous reader:
“Because of Google's ability to raise capital, Google can operate at whatever it finds to be its optimal capital structure meaning Google essentially calls the shots with lenders. What all that means is that Google can generate money at basically any time to increase R&D, hire more Microsoft employees,…Microsoft's concerned because Google's one of the few companies that not only has the know-how to be a big market player, but the means to do so as well.”
That’s far from the only reason Microsoft fears Google – and it isn’t even the scariest, necessarily. A number of news-related websites have quoted from a late October 2005 memo sent by Ray Ozzie, Microsoft’s CTO, titled “The Internet Services Disruption.” One even published the entire nine-page memo in full. Few reporters seem to have done more than skim the document, and fewer still analyzed the whole thing.
In a way, that’s understandable; it’s a long memo, after all, and the contents are hardly shocking. Microsoft does a serious reevaluation of itself regularly, or, to quote Ozzie, “we’ve needed to reflect upon our core strategy and direction just about every five years.” So the company was due, given that the last one happened in 2000. The memo is worth reading because (among other reasons) it answers the question that the headline of this article poses.
So, what does Microsoft see in Google? To put it bluntly, the future. And, to the degree that Microsoft’s own offerings don’t fit into that image of the future, the software giant has reason to fear the search engine.
Next: The World Changed >>
More Search Engine News Articles
More By Terri Wells
