The Art of War: Google vs Microsoft

Google is under siege in Washington like never before and it says an “anti-Google industrial complex” is to blame. In an interview recently, a Google spokesman argued that a cabal of antitrust lawyers, lobbyists and public relations firms is conspiring against the Internet search giant. The mastermind? Google says it’s Microsoft.

In the 1990s, Microsoft was the tech industry wunderkind that got too big for its britches and Google CEO Eric Schmidt, then an executive at Sun Microsystems and later Novell, helped knock the software titan down a peg by providing evidence in the government’s antitrust case against it. The constraints imposed on Microsoft in that case helped clear the way for Google’s rise to rule the Web.

Now as Google spreads its tentacles into everything from mobile phones to digital online libraries to green energy, some of Microsoft’s allies are saying it’s time for the search giant to get its comeuppance. “There is so much conduct that should be investigated,” said Pamela Jones Harbour, a former Federal Trade Commission member, who opposed Google’s merger with online advertising firm DoubleClick in 2007. Harbour, now an attorney specializing in competition issues, consults for Microsoft on competition and policy issues, and she says Google now has a monopoly.

But there are also increasing calls from some Silicon Valley competitors and Washington-based public interest groups for the Justice Department to launch a sweeping antitrust probe of Google. The European Union and the state of Texas have reviews under way. Google says its rivals are fueling the attacks. Specifically, the company points to Microsoft, which has a stable of consultants and lawyers in Washington banging the antitrust drums.

“We try to create lots of new technologies for consumers, and the companies and industries that we disrupt sometimes try to seek recourse in Washington,” said Adam Kovacevich, a Google spokesman, who recently was detailed to deal solely with antitrust issues. “In particular, Microsoft and our large competitors have invested a lot in D.C. to stoke scrutiny of us. But our goal is to make sure that we can continue creating cool new things for consumers.”

Microsoft declined to trade barbs publicly but argues that Google is lashing out amid a growing number of complaints to regulators and lawmakers about the company’s business practices. The company points out competitors usually are the source of antitrust complaints.

One of Microsoft’s antitrust attorneys, Charles “Rick” Rule, of the international law firm Cadwalader, Wickersham & Taft, wrote in The Wall Street Journal in a September op-ed piece that Google is a monopolist and should face an investigation. “What goes around, comes around,” he wrote.

The war dance has continued to simmer and last year Google jumped directly into Microsoft’s home turf by announcing Google Chrome OS, its new operating system for PCs and netbooks. And while we’re still debating whether it will take down Windows or flop like a fish on land, we tend to forget that this isn’t the first time Google has challenged Microsoft. In fact, it’s become almost routine.

Whether its operating systems, documents, search, communication, or mobile, the two behemoths have been increasingly butting heads in a war for tech supremacy. Now with Google Chrome OS making headlines, maybe it’s about time for a straight-up analysis of where the competition between Google and Microsoft stands. So who’s winning the war? And how will Google Chrome OS affect this longstanding battle?

Search –

Search is to Google as Windows is to Microsoft. Google dominate the search market by a wide margin, despite Microsoft’s best efforts (including the company’s failed attempt to buy Yahoo and propping Bing with Blackberry devices). Microsoft had to do something drastic to compete in search, and they did with their recent activities with Bing. It’s received a lot of press, a lot of positive reviews, and has clearly caught Google’s attention. But does anyone seriously think it will overtake Google’s dominance in search anytime soon?

Documents –

Microsoft Office, with Word, Powerpoint, and Excel have been the leading way to create and edit documents for years, and for good reason – they’re widely used, widely known, and feature-rich. There’s also now Microsoft Office Live, which while not as collaborative as Google Docs, isn’t a bad solution and has the benefit of being connected to the desktop apps. Google Docs have been growing in features and users. They provide a level of collaboration that Microsoft documents simply don’t offer. But they don’t provide as many options as Microsoft Office and they just don’t have nearly as many users (they’ve been made inroads especially in Africa of late). This is one area where the majority of users still prefer the desktop to the web.

Communication, Email, and IM –

While Google’s probably more revered for Gmail and its communication suite, Hotmail is still bigger, and Live Messenger is heavily used. Microsoft also produces the popular Outlook software and has software in a variety of arenas, such as Windows Live Meeting, giving the company an edge in the enterprise. Google has a suite of very popular communication products – Gmail and Gtalk being the best known. The X factor in this debate though, is the upcoming Google Wave communication platform, which has impressed us so far. There’s also the intriguing Google Voice offering to consider.

Mobile –

Google’s has good traction with its Android mobile OS given that its relatively new to the space. It runs on more than one million T Mobile phones and has a strong app platform. Many of Google’s apps also run well on mobile phones, especially Google Maps and YouTube. Windows Mobile still shipped tens of millions of units up till 2009/2010, far outpacing Android. It also has apps to run Office, Outlook, and Windows Media Player. We think the long-term trend favors Google, but as of right now Microsoft is the leader.

Operating System –

This is Microsoft’s bread and butter. Windows is the reason Microsoft makes $60+ billion in revenue every year and has stayed on top for so long. Its stranglehold is legendary. Yet Windows Vista proved that it is not invincible, neccessiating the quick introduction of Windows 7. Let’s say this: we can’t wait to see what Google has in store for Google Chrome OS. We’re skeptical that it could ever kill Windows, but Google will be Microsoft’s most powerful challenger yet.

This is surely a battle to look forward to.