Intel’s Andy Grove had a popular saying: Only the Paranoid Survive. It was the name of his book. Another big thinker, Clay Christensen, penned a popular management book called The Innovator’s Dilemma. Keep those two titles in mind as you read the following.
Microsoft’s been known for taking on too many competitors: Apple, Sony, Nintendo, Google, Yahoo!, Oracle, Sun, etc. The list goes on and on. Some are competitors in their core Office and Windows business, others in their emerging businesses such as XBOX, MSN Live, Zune etc. But it has to, cause as I’ve outlined previously, at the current rate, Google’s market cap will surpass that of MSFT by 2010.
But in a sign of how quickly things change, Google is leveraging its online dominance and now taking the offensive to:
- Microsoft with Google Apps,
- Yahoo! for portaldom and email supremacy,
- Telcos by bidding on the 700 Mhz spectrum,
- Wikipedia via Knol,
- eBay/Craigslist via Base,
- eBay/Paypal via Checkout,
- etc. etc.
The NY Times has a great 5-pager on the MSFT/Google fight, MSFT’s own Don Dodge does a great job of summarizing the piece. Because everything is a click away and the Web is indeed a brave new interconnected world, suddenly, you compete with everyone and everyone competes with you.
Incidentally, Google remains to have any notable successes apart from Google, AdSense and AdWords, the latter two which are two sides of the same coin.
Google is now a innovate and grow-by-acquisition company, much like MSFT has been for the past decade, too. This is not to say that they don’t innovate or invent internally at all, gMail is one such example, but it does illustrate Google’s tricky position to compete with everyone and become everyone’s friend.
For example, when I was planning MetaMojo.com 1.0 with Yahoo!’s API, I recall emailing Toni Schneider (who had just sold Oddpost to Yahoo! and ran their API commercial licenses) off my Gmail account. I knew Google was not sitting there and reading my emails, but the thought did cross my mind that Google’s ambitions online would be limited because of its dominance online.
By then, Google Apps was just a rumor, but once they began to assemble the pieces brick-by-brick, you knew they were betting on the rapid rollout of cloud computing in an effort to take out MSFT.
The problem is quite simple: companies who don’t compete with Google (generally offline players) will never embrace or adopt Google Apps because the Web is just not there yet; companies who would embrace or adopt Google Apps might not feel very comfortable with Google hosting anything remotely important. We use Google Apps at our company, but it’s not reliable enough for large documents, so we continue to use MSFT Office. If we were to compete with Google, we would think twice even if it were robust enough. Google, of course, is a partner of ours via WatchMojo.com (we have a partnership with its YouTube unit), but the point is: much like why Facebook chose MSFT to partner with and not Yahoo! and Google, so long as Google seeks to compete with and take out every online company out there, I’m just not sure if Google’s non-search business will take off.
Why? Because only the Paranoid Survive. But Google itself needs to watch its own back, just this week Haika raised $5M in funding, last week another search player raised a Series C $10M round. The Quintura guys seem to be gunning for Google, too (I love those ads, though it might come back to haunt them). PowerSet, still largely a PR machine with little substance to show, also has plans to take on Google. Individually these all seem small, but Google should be concerned with protecting its neck before looking to take someone else’s head off.
I personally think Google’s main threat in search is not from another search player, but rather a wireless search outfit that will be able to organize the information out there from handheld devices, that would be pretty killer… but of course, it’s something Google’s already working on… cause indeed, only the Paranoid survive. But Google itself will be wary of leading in wireless because make no doubt about it, it will come at the expense of its online revenue bread and butter.
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