Google vs. Microsoft: Developing Competition

When a technology company gets as big as Google is, it attracts a lot of attention. A lot of this attention comes from competitors, of course, and the biggest competitor out there is Microsoft. In a war with the giant from Redmond, can Google win?

The short answer is, of course. But one questions whether Google and Microsoft are truly competing in the same space. Some analysts think so, as do many at Microsoft; for their part, however, Google seems to be less concerned.

"We try not to focus on what they (Microsoft) are doing," Google co-founder Larry Page said at a recent analyst's meeting. Google concentrates on innovation rather than competition, Page went on to say; Google is too busy creating new products and services to pay much attention on what Microsoft is doing.

Besides, just because Google is successful at one thing doesn't mean that Microsoft is suddenly less successful. Even though they're both broadly classified as technology companies, Google and Microsoft don't always compete head-to-head. As Google CEO Eric Schmidt noted, "There is room for more than one winner. Each of the strategies can coexist independent of the others."

That said, Google is increasingly veering into Microsoft's areas of core competency, and vice versa. For example, Microsoft is building an advanced search technology into its new Windows Vista operating system, which could be seen as directly competing with Google's own Google Desktop searchas well as its web search. Microsoft is also developing web-based advertising technologies and services to try to lure away some of Google's ad revenues.

On the other side of the table, many have viewed Google's development of web-based services as creating an alternative platform to Microsoft's Windows operating system. In this view, the "Google OS" becomes the main computing platform, not Windows. And, quite obviously, Google Spreadsheets and Google Write are direct competitors to Microsoft's Excel and Word applications. These are a real threat to Microsoft.

So there is definite competition between the two firms, especially when it comes to attracting key employees. In 2005, Google signed about eight new hires per daymany of them lured away from Microsoft. Some of these hires become contentious, such as Google's hiring of former Microsoft executive Kai-Fu Lee to head the company's Chinese operations. Microsoft took offense, and sued to keep Lee from jumping to Google; a judge ruled that Lee could make the move, providing he didn't work on some directly competitive products until his non-compete agreement expired.

Is Google competing with Microsoft? They're certainly competing for employees, which makes one think that the marketplace competition is real. As to whether Google is encroaching on Microsoft's turf or vice versa, that's an interesting questionthe answer to which probably depends on whose side you're on.