Not a day goes by when Microsoft doesn’t announce a new product or initiative that strives to move them from PC to the Web. For a company whose operating system powers 95% of personal computers but trails Google in advertising sales - and sees Google moving into software - Microsoft’s long term survival, let alone supremacy, is at stake.
Of course, Google itself is vulnerable to just a few variables (Ad Blocker, anyone?), but in today’s online-advertising-obsessed world, Google has mindshare while Microsoft’s got Google envy.
That’s why November 12th marks a very important date in the corporate calendars: on that day, a US court order that imposed anti-competitive behavior on Microsoft will expire, meaning that the Redmond-based behemoth can begin to tweak with the variables in the Internet service, content, personal computer and software ecosystem.
It’s not, in the words of MSFT general counsel Brad Smith, like “the regulators will stop watching” or like they will “stop being regulators”, it’s just that Microsoft “will use whatever they can to exclude competitors” as long as the “rewards are there” and “the punishments are slight”, according to New York University law professor Harry Frist.
Microsoft is clearly a very powerful company that can outbid anyone else in any auction, as it did for aQuantive in a $6B bid. In fact, its sheer warchest has the ability to send competitors into a tizzy, as Google was forced to spend $3.1B on Doubleclick - just a year or so after private bankers Hellman & Friedrich took the online ad serving firm off the market in a $1.1B transaction - even though regulators have yet to approve that deal.
In other words, Google - who finished fiscal 2006 with some $10B in cash and generated $1B per quarter has $3B of its cash earmarked for a deal it is not sure it will be able to close. Worst off, it cannot go out and buy others in the online ad space, because that would suggest to the feds that Google itself feels the deal for DCLK won’t close.
As such, while indeedMSFT’s resources alone scare the very same companies that get bloggers and fanboy journalists excited… the fact remains, MSFT cannot sit idle as arduous competitors take the battle to MSFT on its home court: software. I’ll be the first to admit that I love Google’s efforts in free, web-based software, but these are “cute gestures” compared to MSFT’s offerings (try downloading from Gmail, a large Excel file as a Google spreadsheet… right, you can’t).
But where it matters, Google’s stock price has gone from $85 on IPO-day to $550 in a few years, whereas MSFT’s stock has fallen 5% since 2001 when it settled the government’s anti-trust case. In other words, MSFT’s stockholders want to see some movement where it counts most, and if this means exerting more pressure on partners, suppliers and vendors in the ever-blurring software/advertising or technology/media landscape, then so be it.
Digg this Blog
Share on Facebook
WatchMojo on Twitter
WatchMojo on YouTube
Add to Favorites
WatchMojo Newsletter
