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The War Between MSFT and GOOG’s Not Yet Over

The other day, I made some points on this entire move made by Microsoft. Most of this was focused on the effect it will have on Yahoo and how the combined entity will be able to pull off such a humongous merger. There is a very interesting post in the Official Google blog that totally highlights their insecurity:

So Microsoft’s hostile bid for Yahoo! raises troubling questions. This is about more than simply a financial transaction, one company taking over another. It’s about preserving the underlying principles of the Internet: openness and innovation.

Could Microsoft now attempt to exert the same sort of inappropriate and illegal influence over the Internet that it did with the PC? While the Internet rewards competitive innovation, Microsoft has frequently sought to establish proprietary monopolies — and then leverage its dominance into new, adjacent markets.

It’s tantamount to one thief calling the other person a thief! What about Google’s interest in the 700 MHz spectrum? What about their “habit” of copying each product that their competitors release? None of their products like Google Documents, Google Talk, Google Mail etc. are totally “original”. They shouldn’t even be talking about Microsoft’s “legacy of serious legal and regulatory offenses”. Their financial statements were being audited sometime back because the regulatory authorities felt that they were incomplete. Correct me if I’m wrong.

It’s not that I’m against Google. In fact, most of my regular readers call me an “Anti Microsoft” person. So this post is quite out of the line for me. You won’t read such good words for Microsoft very often on this blog.

I think Google feels quite threatened and they have good reason to be. Microsoft has a huge share in the PC Market and if they were to merge with Yahoo, then the internet dominance fight will only get more interesting. The consumers will benefit in either case. So it’s good for the consumers I would say.

Further, they say:

Could a combination of the two take advantage of a PC software monopoly to unfairly limit the ability of consumers to freely access competitors’ email, IM, and web-based services?

Google shouldn’t even be commenting on the monopoly issue here because this is exactly what they are trying to do now. How else would you explain their coming out with every possible internet service and all of them being accessible from a single Google account?

And you’ll find it interesting to know that I could hardly find any “Google suggestions” when I started typing “Google trouble” or “Google audit”. Of course, Yahoo! gave me more results for once.

Market Watch (owned by News Corp) has another take on this entire issue. I kind of agree with what they have to say because it’s perfectly logical and quite unbiased. While they mention this positive point:

If Microsoft’s acquisition of Yahoo is consummated…

…the Goliath of the PC desktop will represent the one truly credible competitor to Google in the online world. (News Corp. is the owner of, the publisher of this column.)

They also mention the negatives:

Put it all together, and Microsoft/Yahoo vaults to the number one position with site traffic that’s nearly double Google’s. That’s the good news. The combination would still lag Google’s sales by a factor of two to one — $2.6 billion for Microsoft/Yahoo in the last quarter of 2007, despite the traffic advantage, as compared with $4.8 billion for Google.

And I agree that Microsoft +Yahoo is the only way that Google can be stopped. Otherwise, even though Google propounds “Do No Evil”, this is exactly what the company has started to do and will do full scale in the future.

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24 thoughts on “The War Between MSFT and GOOG’s Not Yet Over

  1. My two cents:
    I think in the online world Google is the new Microsoft. It was in past when Goolge was David and MS was the Goliath .. Google is the new Goliath and only a strong competitor coming out of merger of MS and Y! can fight this Goliath.

  2. aah! Enlighment attains Ruhi at last. 🙂
    I used to be a Google fan, but no more. I have been singing the anti-google song since long now… and with some substance.
    Apart from the loads of insecurities that Google products hold in them, most aren’t really in-house products anyways. Most are acquisitions. uh! I don’t want to get started on it all.

    Anyhoo! Nice to know that the Google-hypnotism is gradually decreasing. Google fans are no more blind to the true nature of the giant 😉

  3. I used to be a Google fan as well, but my enthusiasm has completely drowned down with Google’s persistence to become God… omnipresence EVERYWHERE!

    Google has foreseen the threat & is doing everything possible to stop this acquisition… including grabbing a deal with Yahoo! 😉

    & yeah, i’ve done a post as well on MS & Yahoo! 🙂

  4. of course.. google is threatened by this deal..
    the biggest competitor for google is yahoo ,so once it falls in hands as big as Microsoft , it would certainly feel insecure..
    i ma not a microsoft supporter either..
    but this deal would certainly lift themin hte eyes of public.. (not me of course :P)
    sometimes i feel half of the internet is GOOGLE ..ISN”T it ..
    hail microsoft for this step .. 🙂

  5. well chk out Ajays blog in my economics roll
    his analysis is very interesting and to the point
    on the goog -ms war im for google as its applications are all usable and good in comparison to that from ms , tell me why did u shift to pidgin? and whats of hotmail
    i still think bhatias hotmail was better with him than ms

  6. as it is internet is a superfast medium and once u bug ur customer who is sufficiently suave or geeky
    he will shift and ur valuations will dive
    one has to consider what has made goog a net monopoly
    why does one prefer firefox over ms ie?

  7. Genuinely speaking, Market monopoly is something I’ve not quite understood so it would be illogical to say something silly in here. One thing I can agree on though, this is making Google really insecure. If MS+Yahoo! does happen, Google will not exactly be in trouble but they’ll definitely be hit.

    If nothing else, at least we will get a pre-included Yahoo! Messenger installation with MS-Windows. That saves me 10 Megabytes worth of downloading. Makes me pretty happy. 😛

    Just to make this comment look longer, here’s another useless fact – The Yahoo! Messenger for Windows Vista is crap. That’s it, gonna go back and revel in the glory of passing a Maths exam finally. 😛

  8. @ Anand:

    Precisely. This is what MSFT hopes to do at least. Or maybe they don’t have any hopes left and this is the only thing that Ballmer can think of. That’s what Fake Steve Jobs thinks. Take a look at this:

    Very nice read. 🙂


    I have always been anti-Google. But I have also been anti Microsoft. I think I’m anti anything that I don’t like. I don’t care what company it is. That said, even I don’t like the fact that most of the Google products are not “Original”. Even GoogleDocs- there are many other similar applications like Zoho etc. It’s become a fashion to be a Google fan. Whatever they do is ‘cool’.


    Yes I read about their new offer regarding the search engine bit. Can’t believe that they’re actually talking about THAT! I mean, how insecure must Google be to let Yahoo know that they are willing to help them (but please don’t merge with Microsoft). Very surprising. 🙂 Will take a look at your post. Thanks for letting me know.


    You are thinking exactly like me here. 🙂 I don’t like either of the companies. But if we consider Google’s actions, then what Microsoft is doing now appears less devilish to me. The consumers will benefit anyway.

    And yes, after talking to Google evanlegists, even I think that only those services that are owned by Google are good…the others are all BAD.


    Will take a look at Ajay’s blog. Which Google applications are you talking about? None of them are original, if you notice. There are many other applications in the market that do the same thing. GMail is cool, I agree- but the security is not that good. Google Docs- I’m not impressed. There are other alternatives too. Google Search Engine is the best product offered by Google, if you ask me. Yes, their products are simple- but anything can be simple if you remove some of the features, right?

    Regarding Pidgin- I use it because it helps me use all my IM clients at the same time. In fact, if you have two yahoo/Gtalk/MSN accounts, then you can simultaneously log into both of them. There is no limit. It is fully customizable. You need to use it to know why I use it. 🙂 I can even make the chat window transparent so that when the person I’m chatting with is not pinging me, then the inactive window becomes transparent (Even while remaining maximized) and I can easily browse the main webpage. Many others things.

    Hotmail- I did use it when Bhatia had it. But it wasn’t good even then. The spam system was terrible. I logged into my Hotmail account 2 days back- just to see what it looks like now. And it doesn’t impress me one bit. Those ads are annoying.

    one has to consider what has made goog a net monopoly

    This is completely untrue. The consumer is not responsible for making a company a monopoly. It is tantamount to saying that the consumers have given Google all the power! No- it’s the other way round. It’s the company’s actions that pave the way for their economic competencies.


    You raised a very imp. point- Packaging of Yahoo IM by default. 🙂 Now I would hate that too because I don’t see the point of having so many chat clients. It consumes my RAM unnecessarily. Better to use one client that integrates all of them. And yes, Google will definitely be hit if this merger takes place. Their comments on this scenario further illustrates this point. And all the best for your Maths exam. 🙂

  9. I think I’m anti anything that I don’t like. I don’t care what company it is.

    This could go in history with the likes of I’ll be back one-liner. 😉

    It’s become a fashion to be a Google fan. Whatever they do is ‘cool’.

    Oh absolutely! Talk about apple and it’s crippled products, and then talk about the apple fanboyism.

  10. I agree with your points 🙂 99% ..hmm but why u dint mention that part which says,

    The openness of the Internet is what made Google — and Yahoo! — possible. A good idea that users find useful spreads quickly. Businesses can be created around the idea. Users benefit from constant innovation. It’s what makes the Internet such an exciting place.

    We take Internet openness, choice and innovation seriously. They are the core of our culture. We believe that the interests of Internet users come first — and should come first —

  11. agreed,
    the google monopoly worry’ s me too . but still their apps are functional and relatively add/ backdoor free
    and usable, also being a monopoly helps- everyone switches to their app so no compatibility problems
    i was talkg abt gtalk and msn msgr comparison
    if they mess up there will always be others ,
    im scared of what msn will do to yahoo and my yahoomail on the other hand

  12. Regarding Pidgin- i also use it for the very same features u mentioned , but still i cant audio chat

    Hotmail- I did use it when Bhatia had it. But it wasn’t good even then. The spam system was terrible
    – agreed but it wasnt that bad for me cause i didnt subscribe to their stuff or make my id public
    yes fighting spam is still an ongoing war because of its very nature

    //This is completely untrue. The consumer is not responsible for making a company a monopoly. It is tantamount to saying that the consumers have given Google all the power! No- it’s the other way round. It’s the company’s actions that pave the way for their economic competencies.//
    how can that be – net is a free medium and people can switch
    essentially a monopoly is made due to lack of alternatives and as u mentioned google is better than competition – i say it will retain that status until someone does something better than google
    why do u prefer gmail – its better than competition
    why do u pref gtalk – it is widely used and functional and add free
    if competition throws something better it has to catch on and bye bye google marketshare

  13. @ dinsan:

    I feel that the parts that I mentioned already reflect that “Holier than thou” attitude that Google is trying to project here. And I did provide a link to the original article. I don’t need to procrastinate every single sentence in the original article, right? 🙂


    What do you mean by “add/backdoor free”. Do you mean “advertisements” by the word “add”? I’m a little surprised by the line of argument that you’re resorting to for explaining how a monopoly can help a consumer.

    Talking from an economic point of view, consumers have no choices when a company is operating as a monopoly. The company makes positive economic profits and has a high profit margin. The consumers don’t even know what they should be paying. Since there is only one company and that company has a monopoly, the consumer becomes a price taker. So, I don’t really understand what you kind of argument you are putting forth when you say that it helps everyone! That’s quite blasphemous in my opinion. A company becomes a monopoly due to several reasons- high barriers to entry, special access to natural resources or govt. policies and other patents that protect the company product secrets. None of the reasons for a company to become a monopoly include “lack of alternatives” or the “Consumers giving the company the power to become a monopoly” as you seem to suggest.

    And prax, I don’t prefer GMail. I switched to it 2 days back because Yahoo’s security center is giving me trouble and because I can access their IMAP/POP without an external application. Yahoo’s free account doesn’t have POP/IMAP access and I’m using Ypops for downloading Yahoo! mail to my desktop client Mozilla Thunderbird. I refuse to use Outlook 2007 because it’s too slow and freezes way too often.

    And Google products are not secure- let me tell you that. Even now when I logged into Google Apps for making an mail account for a domain name, my address bar turned red indicating that it’s not secure. Only Google fanboys find Google products to be better, which I don’t purport to be.

    I don’t use Gtalk either. It lacks too many options. I prefer Yahoo! IM and I use that with Pidgin. I don’t voice chat- so Pidgin is fine for me.


    Oops. Second time I misread your comment. Damn!

  14. @ Prax: Read his analysis on the entire MSFT_Yahoo issue and I don’t agree one bit. He says that projects should be guided by prospects and not by cash flows. Whose cash flows? Cash flows of the parent company or of the potential merger? Secondly, how do we measure prospects? Even a slight error in the input value will produce a large deviation in the final value. If a parent company is guided only by the “prospects” and not by the cash flow of the parent firm, then what they are basically doing is investing in Projects that have Negative NPV and are destroying shareholder value. So, only those projects that produce a positive NPV based on the future cash flow and the initial investment analysis should be accepted, so that the project finally adds value to the share holder.

    If the company is mature and doesn’t have any positive NPV projects, which might be the case here, then they should pay out excess income in the form of dividends. But this is easier said than done, esp. for tech firms like Microsoft, who, traditionally, have never paid high dividends. Instead, most of these firms pay special dividends sometimes. So I don’t know what Ajay is trying to say. It’s quite funny IMO.

  15. It’s okay, my comments are too unimportant to be read properly. *Does that cheap nobody likes me thing straight out of the bollywood movies* 😛

  16. As it happens teaching a Google case study, followed by a Google masterclass in the form of a rare speaking engagement by a senior Google employee is what consumed my Tuesday. So I can say a lot here but for now, I have to recover from it all. 🙂

  17. @ ish:

    OMG! Stop this. 😛 You need a good beating.


    Sure, take your time.


    You should make a post out of your findings. I would be very interested in reading about your take on the entire issue 🙂

  18. kelvin says:

    like you said, competition is good for consumers, and strengthens alternatives for market participants, so this is not different as we speak about market orientation that fasthold principles of preassure easing on the consumer-cost side of things, so personally i believe this is good as it goes and most importantly is guarded against intrusion or possibly development of a gigantic collusion from o GIANT company in the future, therefore attaining market liberalization in the interests of consumers has to be kept under heavy monitoring system, that is my take on this issue

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