Google Does to Microsoft what Microsoft did to IBM

Google has become the essential utility of our time.

Its influence is ubiquitous and constant. In writing any post to any of the blogs I serve, I will usually go to Google 20 or more times, to check stories, to collect thoughts, to add links and find illustrations.

I go to Google because Google works.

It works better than Yahoo, better than Microsoft, better than Ask.Com. Often it works better than the search offered by the site I’m on at the time. I’ve often used Google, for instance, to find recent articles on a topic I’m writing about, posted on the same site I’m posting to.

Of course Google is not perfect. To find this story, about a bid for my current employer, C|Net, I had to use the article’s title, and I had to use the Web search rather than news.

Even Google’s failures have real world consequences. Innocent bystanders can get drilled.

John Akers (right) was in his 50s and running IBM when Microsoft overtook the company during the 1980s. This will be seen to be important later.

I often find that Google doesn’t know how to categorize stories and sites. This is getting worse as more sites, like ZDNet,
move toward a blogging format. Is this a story or a blog post? How do
we make that decision immediately, through code? These are difficult
questions, and I believe Google has dealt with them recently by downgrading
ZDNet in favor of News.Com, meaning blog posts at News.Com get more
prominence in Google News than my own.

As a result I may get less traffic, and earn
less money. And this is a big part of the story about
C|Net’s own problems. It is losing out to ad networks, like Google,
which means it’s earning less from each page. The author writes about a
need to compete with blogs, forgetting the company has hired dozens of
bloggers (including me).

But the point remains. Google’s entry into ad service means it can
deliver value to targeted groups of readers, competing directly with
news industry sales staffs. Those who wish to take over C|Net feel that
company should also become an ad network, and the company is looking
into that. At the end of the day I don’t see much difference between
what the dissidents want to do and where C|Net itself is going. But the
problem for either slate is the same — Google.

This makes Microsoft’s effort to take over Yahoo
so intriguing. Steve Ballmer (left, who is now in his 50s) is literally willing to bet his company in
order to take on Google, knowing that without this move Google will
eventually eat Microsoft’s lunch. He has seen this movie before. It’s
what Microsoft itself did to overtake IBM. Even today, Microsoft is worth nearly double what IBM is worth. And Google is now coming on like Obama after Clinton.

Microsoft overtook IBM by understanding that the key to the future lay
in controlling the base software of the client. Windows’ outmaneuvering
of OS/2 is legendary.  Now Microsoft understands that control, such as
it is, of the Internet means control of the search function. Google
kept its eye on this ball and now has this ball. Microsoft must respond
or lose the future.

The problem is Google may already be too far ahead, and the Yahoo
acquisition won’t change that. Google’s lead is based on more than its
search algorithms. It’s based on parallel processing, on cheap
hardware, and on dark fiber to cut the costs of search. Buying Yahoo
won’t cut Microsoft’s search costs.

In the end, the better play for Microsoft might have been to buy IBM.
IBM’s programmers have the skills, and IBM has the resources, to build
a search engine that might be able to go head-to-head with Google. It
is, now, a systems integration company. There is no bigger, better
systems integration task today than trying to beat Google at its own
game. "Buying" market share won’t get the job done. You have to do the
blocking-and-tackling needed to deliver the value that customers expect.

It reminds me a little of the Super Bowl yesterday. Everyone talks
about Eli Manning, but the game was won from the first snap to the last
by the superior play of the New York Giants’ offensive and defensive
lines. They got to the other quarterback, they protected their own.
They stopped the Patriots’ running attack, and got runs of their own.

Microsoft is throwing a long pass when it should be shoring up its interior line.