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Google vs Microsoft: what's in a name?

Microsoft is a trainwreck. I used to abhor the desktop monpolist as an evil threat to standards-based open source innovation. But in the last decade they've been screwing up so badly I almost feel sorry for them. As much as you can feel sorry for a massive corporation that is.

One thing that puzzles me in particular is how Microsoft fails to grasp that their efforts to compete with Google in the search space are a pointless waste of countless billions and a lethal distraction that has allowed Apple to wipe the floor with them in the post-PC era.

Why? Because you can copy technology, but you can't copy a brand, and the brand dramatically skews how people evaluate the quality of your search results. Just like Coca Cola, Google tastes better when you know it's Google. It doesn't really matter if you can crack the secret recipe or not.

For technology oriented people like me, I admit it was a bit hard to wrap my head around this notion. That, yes, a big and maybe the most important part of Google's massive valuation has nothing to do with the impressive technology working behind the scenes, but something as ephemeral as branding and good will. It's true though. The Google brand, a distributed asset that manifests itself as patterns of neural associations in the minds of billions of Google users is nearly priceless because it makes Google nearly impossible to compete with (in the search space) regardless of how many billions a competitor like Microsoft pours into competing at the technology level.

Google's brand is based on the perception that Google is one of the good guys. Do no evil and all that. The clean default search page (e.g., compared with the portal pages of yore). Unobtrusive text ads (e.g., compared with flashing banner ads). Those playful festive doodles.

Most users perceive Google as a friendly, trusted benefactor working to promote them, not itself. Many users (read - my Mom) don't even understand how Google makes money, but all of them enjoy the free service it provides them - the gateway to almost infinite supply of information for free every day.

Google, by enriching its users "selflessly" has courted the love and trust of billions and turned them into its most powerful allies against would-be competitors.

Compare that with Microsoft, a company that up until recently was widely perceived as a ruthless abusive bully willing to screw over just about anybody (its paying customers included) if it served their interests.

Google users reaffirm their choice to use Google every day. The monopoly's network effects basically forces them to pay through the nose for an operating system despite the existence of technically superior, free open source alternatives.

With that kind of baggage it's very unlikely that Microsoft will ever be able to compete with Google on a level playing field in the search space. It kind of makes me wonder why they even bother to try.

Comments

Dream Cutter's picture

Absolutely true, you can tarnish a brand faster than you can invent products so technical feats mean little if you do not present them to the consumer effectivly. The key to success in marketing is building a recognizable, endearing image that promotes product adoption and position it ubiquitously.  

With that we publish yet another shameless plug...

OnePressTech's picture

For those that don't know the fable...http://en.wikipedia.org/wiki/The_Scorpion_and_the_Frog. That's large multi-nationals :-)

If you wonder about why Microsoft continues to go after search, Microsoft has NEVER led in any market it leads in today...networks (they killed Netware), Office (they killed Lotus Notes), PC Operating Systems (they killed IBM). There is no reason to believe they can't clean up in search...even if they get to number two after Google they'll still make a killing. And since Microsoft succeeds on acquisitions...they just need to spend their way to that position.

If you think they are alone in tilting at windmills...think of the money Lotus, IBM, and others pumped into MS-Office killer "wanna-be"s.

The only error I have ever seen in Microsoft's past was their lack of monetisation of their loan to Microsoft in 1997 when they put Apple on life support. But then who could have predicted the meteoric rise of Apple...a proprietary software company...who is also looking to eat at the advertising buffet.

If interested take a look at their respective revenue splits.

 

Cheers,

Tim (Managing Director - OnePressTech)

Jeremy Davis's picture

Your perspective fills in a few gaps for me. Also I followed your links and had a read, which bought up a few things...

Firstly I was completely unaware of Microsoft's "lifeline" to Apple. They would have certainly ben much better off to monitise that better... But I guess that's easy to suggest in retrospect.

On the revenue split article someone suggested that if Microsoft wanted to disrupt Google then they could play Google's game but from the other side. Google has sought to disrupt Microsoft by essentially saying that the OS should be free and/or is irrelevant (Android and ChomeOS). They have also essentially said that software should be more-or-less free for consumers (e.g. Google Apps). These are MS's big breadwinners. Google's big breadwinner is advertising.

So what if MS started 'giving away' ads on Bing? It might be tricky to scale (If they weren't careful they'd end up with nothing but ads and no customers) but I think that it's still an interesting thought...

Carlos Benjamin's picture

Google vs Microsoft - God bless them both!

Well if it weren't for the rivalry and for competition factors, will never have excellent services and software. So, we may just have to suffer and take the abuse, common trade mark from monopoly heritage. Because, we not dependent on one, we can leave and go elsewhere.

We can choose and as long as those elements are in play, we can expect them to try and out score each other. And, bottom line that is good for us, the user and consumers.

Today, Google may have the lead right now, in your opinion, but then they have to keep it. Because, the competition is right behind.

Because, that the bottom line, competition and being the best.  You also have to take into consideration that many people don’t like change, and some for sentimental and loyal endeavors will die with Microsoft or Google. It’s like the practice of religion – born a Catholic …die a catholic. This is not intended to offend anyone, if I did my sincerest apologies.

So, I say thank God for Google and Microsoft, they are setting then trend, some has to be in the lead.

In short every dog has it day, now is Google time.

 

CB

 

Jeremy Davis's picture

I recall years ago when I first started using the internet Alta Vista was the search engine of choice... I don't even recall hearing of Google until early 2000s. And Microsoft was pretty cool in the late 90s. Windows was pretty ground breaking a that time (or at least it seemed so to me... At the end of the day, the fact that MS still survive and remain (at least somewhat) relevant is definitely a testament to them.

Google are certainly in the box seat to continue on as the 'winning' company. And unless something radical changes I think that MS will continue it's slide into oblivion... Who will be the 'big' company of the 2020s I guess we'll have to wait and see how the chips fall! :)

Joey Famiglietti's picture

Microsoft is /no/ angel...and if we look at some of the core points, Google is somewhere within range of Microsoft levels of evil in certain respects (their recent hostility toward the modding/rooting community in recent versions of Android, 'Labels' not working too well in IMAP, G+ 'real name' policy, etc.). However, the admittedly heavily-streamlined history of Microsoft's core brands are a bit incomplete...

Microsoft won over Novell in the server room for two reasons...first, admittedly, relatively unfair licensing bundles where Windows Server support contracts made Windows a bit too good to pass up. Novell had a few other things going against it. Support and per-seat licensing costs were getting outrageous, and IPX/SPX, while super easy to set up, wasn't terribly friendly to the network infrastructures of the day where that amount of broadcast traffic was noticeable. Put it all together, and Microsoft didn't just spend until they succeeded, they made NT server a viable alternative to Novell, waited for Novell to cook their own goose, and made sure that Microsoft's pricing list was the next best thing.

Again, Microsoft promised Windows 95 just long enough for OS/2 Warp to be a challenging sell for most desktops, and I'll certainly hold them to task for that. However, IBM believed that the real money was in servers and mainframes. OS/2 hasn't been officially sold by IBM in years, and eComStation is its own derivative as IBM left Warp users out in the cold right around the release of Windows XP.

Lotus Notes? I've yet to meet a Lotus Notes user who doesn't pine for Outlook, or a sysadmin stuck supporting a Notes environment who doesn't lust after either Exchange or...basically any alternative. Microsoft may have "won", but it would require trenching equipment to /not/ clear that bar. The advantage MS had over IceWarp and other Exchange competitors were partially licensing deals, and possibly the "Coca Cola' effect you site above.

Bonus round: IE6 sucked. Netscape Navigator at that time sucked just as badly, and then got worse.

Now all that being said, the common thread here was that it took a serious misstep on the part of the incumbent in order to leave Microsoft with a place to sweep up the pieces. Google is pretty good at holding their own in that respect. While Wave and Glass may not be their success stories, the bottom line is that search basically drives the internet, and that's where Google's money comes from. Bing can probably be a solid #2 if they keep improving the algorithms, but for Microsoft to win, Google must first lose. Throwing money at the problem leads Microsoft to have a well-funded problem. Once Google screws the pooch, Microsoft can pick up the slack. I personally prefer Outlook.com to Gmail, and OneDrive is pretty good as well, so the products themselves don't suck as bad as they used to (at least in my opinion). However, the key here will be Google's misstep, not another quarter's worth of profits from the Windows Server division in order for Microsoft to slingshot past.

 

Joey

OnePressTech's picture

Nice elaboration Joey. All true. I was just too lazy to fill in the details...a little exercise for the readers :-)

I remember in the 90s working at Nortel/BNR when the key-systems division decided to move from its in-house real-time O/S (QNX) to either OS/2, Unix or NT (needed more diverse driver support). Unix was just too unwieldy, NT at that time was too new and not reliable enough so we went with OS/2. Great O/S at the time. Small, fast, robust and lots of driver support (lots of banks were using it). The problem was IBM were spending all their money trying to make OS/2 into a desktop O/S to surplant Microsoft. OS/2 as a server was the lower priority investment. Additionally IBM as a service company was selling NT. We couldn't get a straight answer out of IBM. The OS/2 guys said all was good but the service guys were saying that IBM was moving to NT! So, once NT was robust enough...we moved to NT. We would have stayed with OS/2...imagine how great it would have been if IBM had invested the "desktop" money into OS/2 as "the" server. They would have kicked NT's ass...but IBM was so large they were in competition with themselves...seriously confusing for the customers!

That's where Microsoft's strength has always been. They decide to be in a business and then keep plugging away until they succeed usually through acquistions.

History has shown that monopolistic players lose their monopoly because they feel they are the best and don't have the humility to admit that their solution leadership is transient. With short-term compensation models they just aren't paid to think long term. Yahoo could have bought Google for $1m but passed. Then at $3B...they passed again! Why...because they already had a search engine and were #1 in search. They couldn't see that Google was a better mousetrap. AT&T was offered the Internet to run and they turned it down ( http://psleaders.com/publicsafetyleadership/cognitive-bias-att-owned-internet/ )...the list is endless.

Only time will tell where these companies will all end up. Microsoft, Apple and Google have been powerhouses through their strong leadership (benign dictatorships!) with no committee decisions to mess them up (Apple almost went broke after they got rid of Jobs). But Jobs is gone, Gates is semi-retired...Page/Brin team still going strong though. Bodes well for Google I would expect :-)

Interesting tangential note about Yahoo...one of their most noteable successes over the past 5 years was not innovation but just plain old business horse sense on the part of Jerry Yang...a $1B investment in Alibaba now worth $40B to the company...which Yahoo is spinning out leaving behind a pretty anemic company we'll call YaWho...remember when Yahoo was #1...another one bites the dust :-)

 

Cheers,

Tim (Managing Director - OnePressTech)

Eric Reesor's picture

@Tim Hibberd

Although I agree with the majority of your analysis regarding the war between Google and Microsoft. However Yahoo investing heavily in a search jumping site aggregating web crawler that injects results into any search that might be a search for the purposes of the purchase of product is a serious error on the part of Yahoo.

Search jumping web crawlers just do not work for the very reason that they return spurious results that are hard for the person on the other end to get out of. Like porn site links they lead in circles to sites that are poorly designed, have deliberately aggressive sales tactics that use pop ups that the user has to swat at with the mouse to get out of and worse than that quite frequently confuse the dickens out of users.

It is almost as if injecting Alibaba results into Google searches is a deliberate poison designed to put users off using Google at times.

I predict that Mozilla will choke on their decision to use and support Yahoo for this very reason. I personally block Alibaba and find the results that it generates to be largely useless because of the reason that it is too easy for web masters that are bent on forcing their way into searches and keeping the user on their sites are all very good at spoofing the Alibaba algorythm.

My wife frequently gets into trouble clicking on results from Alibaba and winds up having to shut down the browser if I am not there to sort through the mess of open windows that Alibaba search results inevitably leave open on the desktop. We have 4 gig of ram on her computer and she sometimes causes the computer to slow down for crying out loud when she gets going and does not realize that her search results have umpteen million pop ups behind the main window! Like Aladins Cave Alibaba sparkles but beware of the door slaming on you!

IMO Alibaba is the bigest piece of garbage ever to hit the net and deserves a quick and painful death at the hands of Google. It is worse even than the default mile long Bing setup with all the bells and whistles that Microsoft thinks a user needs in Windows 10 tech preview. At least with Bing you can a simple search and ignore spurious results and still turn off the so called personized front page!

Google already went down the personalized web gadget route and found that it is a dead end their change to a simple interface by default without flashing gadgets attached by default and logical unabtrusive ways to get at other Google services if you have a Google account is spot on.

Yahoo is heading down the road to oblivion and they are bringing it on themselves. So is Microsoft in the field of professional audio and video production because of their stupidity regarding audio api standards!

OnePressTech's picture

Hi eric...I agree with your observation that Yahoo is going down the road to oblivion. My point is that this has been the destiny of most companies that were once #1. You seem to be under the misapprehension that I was a proponent of the Yahoo Alibaba acquisition. I was simply commenting on the fact that a company that used to be #1 in search can only seem to make money anymore through lucky business acquisitions...and even that acquisition was made by the ex-ceo and founder Jerry Yang. Large companies homogenise what makes them great. Add short-term bonuses into the equation and it takes less than a decade to kill a market leader from the inside out.

Just an observation :-)

 

 

Cheers,

Tim (Managing Director - OnePressTech)

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