By Jacqui Cheng | Published: November 09, 2007 – 03:30PM CT
Ballmer’s comments are misdirection: Microsoft isn’t doing as well online as it would like us to think. Live Search has long taken a distant third to Yahoo and Google in the search realm, although it recently got revamped to better compete with the big boys. But Ballmer knows this: “In the area of search specifically, Google would lead,” he was quoted saying by the Sydney Morning Herald. Ballmer’s message is simple: sure, Google owns search right now, but the pie is much, much bigger.
If not search, then what else is Microsoft trouncing Google with? Microsoft’s sacred cash cows are its financial strength: the client OS and Microsoft Office. The latter, however, is under attack from online offerings, and Microsoft has been playing catch-up. Consider Office Live, which offers software-as-a-service add-ons to Microsoft Office, creating an ecosystem solution that competes with Google Apps for Your Domain. Both allow small businesses to outsource their domain, e-mail, web hosting, and document collaboration to Google and Microsoft. Google made moves in the space first, but Microsoft believes it still has the lead here, if only because Microsoft Office is the default office suite in use by most businesses today. The question is, for how long?
Microsoft currently has no answer for Google’s set of free online apps. Google Documents & Spreadsheets (and now Presentations) is slowly siphoning customers away from Microsoft’s Office suite. Although there are still a large number of criticisms for Google Apps, it’s still picking up steam for being easy-to-use, platform agnostic, and most importantly, free for most users. It’s not going to take down Microsoft Office overnight, but the threat is real.
And now Google is making its foray into another area that competes with Microsoft with its recently-announced platform for mobile phones. Ballmer took a (not entirely undeserved) jab at Android when asked about how it compared to Microsoft’s popular Windows Mobile platform. He told reporters that it was difficult to comment on something that was still “just words on paper.” Harsh, but true. Why exactly Google chose to announce Android when it had no phones and not even a developer SDK available is still a mystery. For its part, Microsoft’s view is “wake us when there’s something to comment on.”
Microsoft is still basically a client/server software company—one that is struggling to compete with what could be considered its powerhouse equivalent in the “online” world. And even with Google’s foibles, the company has still managed to take a strong lead in nearly every area it chooses to seriously explore. If that’s not a threat to Microsoft as people’s desktops move online, we don’t know what is.