Corporate Nightmare: Google Is All Things To All People

Another week brings a few more reasons to either love or hate Google, depending upon who you are and which conference you are attending.

Google's largest developers' conference this week is aimed at stimulating more ingenious applications from third parties for the company's lofty cloud computing endeavors. It's a glimpse of the amazing things to come, using Google Android-equipped phones and other mobile Internet-connected devices to comparison shop in stores by scanning a product code into the Web or improving your golf game by imputing data to determine distances to the hole or which golf club to use.

The skies already are crowded with 10 core companies that have exposure to cloud computing growth, including Amazon, IBM, Microsoft,, Sun, Akamai and NetSuite. They are chasing what Merrill Lynch estimates to be a $160-plus billion opportunity for business and productivity applications, as well as online advertising delivered from centralized servers for more cost-effective share processing, storage and bandwidth. When CEO Eric Schmidt declares, "the Mobile Internet business will be bigger than the PC-based Web," it is Google's next major business model.



And that's what worries Microsoft chiefs Bill Gates and Steve Balmer, who reasserted their anti-competitive fears about Google at this week's All Things Digital conference. The boisterous Balmer used a whiteboard to illustrate the world as a flywheel, with publishers (in the broadest sense) and advertisers reaching across the same world of consumers. This is where Google now dominates about 70% of the search market, which generates more revenues than Microsoft's monopoly Windows software.

"If nobody has scale but Google, what happens is that the value eventually gets transferred from publishers and advertisers into the ecosystem... Some day all the ads for The Wall Street Journal Online might be sold by one guy, and he'll tell you exactly how much your editorial is worth!" Balmer groans.

Scale was the impetus for Microsoft's defunct bid for Yahoo, which generates double the online revenue that Microsoft does. Gates and Ballmer explain in mumbled undertones how they can achieve lots of the same online display, user-base objectives through a series of complex Yahoo alliances they refuse to detail.

It doesn't help their case when they demonstrate multi-touch function screen PC technology that will be built into Windows 7 and go to market in 18 months--after they work out all the kinks in Vista. Touchscreen technology already is in widespread use on iPhones from Apple--another rival Microsoft doesn't like. In fact, the crafty Apple-Microsoft, I'm a Mac-I'm a PC commercials are a pop-culture fixture. "Steve Jobs has a great business. His model works well, but so does ours: 10 million people like his model, 290 million like ours," Balmer trumpets.

That's really what this is all about: Who can move fastest to bring the best innovative change to the masses. If Google is about scale, then Apple is about speed to market, another worry for Microsoft.

Apple CEO Steve Jobs became high-tech's self-ascribed Everyman by making smart, simpler devices for entertainment, information and communications. Next month, he will unveil a new version of the iPhone that can surf the Web over fast 3G wireless networks. Forrester Research predicts that by 2013, Apple will be colonizing the home with touchscreen, interfacing digital wall picture frames, speakers, alarm clocks, hybrid TV-PCs and other new smart devices--all serviced by a trademark Apple Genius Bar help center.

That Google is setting itself up as the ultimate arbiter of all advertising, content and knowledge grates away at Microsoft's brain trust and so many others. "Guys like us avoid monopolies...We like to compete," quips Gates, in a tough-in-cheek response to Microsoft's storied conflicts with domestic and global anti-competitive regulators.

Viacom is turning up the heat in its $1 billion copyright lawsuit against Google's YouTube, charging that it encourages infringement of the copyrighted content it hosts by providing users with the necessary tools and features that make YouTube a copyright infringement enabler. Google's defense: It is not responsible for how consumers use its site. The lawsuit "threatens the way hundreds of millions of people legitimately exchange information, news, entertainment and political and artistic expression." This is the same YouTube that is still scrambling for a profitable business model and has yet to generate any advertising or other material income nearly two years after Google acquired it for $1.65 billion.

If Google thinks it has problems now, wait until it begins moving individuals' medical health records or corporate e-mail into the cloud. There is plenty of room for competition, especially when you move the fight for consumers and ad dollars into the clouds--unless, of course, you don't own enough servers to play in that game.

Microsoft is making advances in its own right, and has arguably played the most important role in making computing as normal as breathing. But the ground is shifting under its feet from hardcore to downloadable software; computing is taking off into the stratosphere with all things attached, courtesy of Google. Whiteboard pictures, high-decibel complaints and public teeth-gnashing aside, Microsoft's best response would be a competitive one.

Next story loading loading..