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#$%@ Kill Google!

An intriguing but eventually vicious three-way battle is emerging between Microsoft, Yahoo! and Google for net supremacy. How each is dealing with the competitive threat says a lot about their individual company culture, management and DNA. (If you're wondering why I didn't include AOL, it's because their business seems to be moving in the wrong direction, rapidly atrophying with nearly 900,000 fewer subscribers last quarter.)

Microsoft:

Microsoft has recently made a concerted effort to hire even-keeled, friendly liaisons within the community, giving them the authority to speak for the company and the authorization to pay off those that might speak negatively of Microsoft. Behind the scenes, however, it's still the same team running the show - management that has been twice convicted of illegal actions against competitors, and that sports a stunning lack of ethical boundaries. Recent court documents from a fresh legal battle over an employee jumping ship to Google report Microsoft CEO Steve Ballmer throwing chairs and screaming many unprintable words, capped off with, ″I'm going to %$#@ kill Google!″

The only way Microsoft knows how to operate is with an enemy in their crosshairs. A few years back, Linspire (then Lindows) was the recipient of Ballmer's profanity-laden tirades. But Microsoft's attention has since been somewhat diverted from the ambiguous threat of Linux - which doesn't present a singular target - to Google, whose O's make convenient bull's eyes.

Look for Microsoft to employ the same approach they have used historically to fight competitors. First they will use technology barriers within new versions of their operating system to dramatically favor their own products and discredit competitors. With previous competitor DR DOS, they embedded intentional incompatibilities, spurious error messages and bogus issues of compatibility. With Netscape, they deeply embedded their own products and falsely claimed they could not be removed. Expect much of the same with Vista, their newest OS.

In addition, look for exclusionary contracts that preclude computer manufacturers from pre-installing links and software from Yahoo! and Google on PCs they sell. With the same unethical management in place, a legal process that takes years to litigate, and inevitable legal penalties only representing a tiny fraction of profits, you'd be crazy not to expect Microsoft to extend the same behavior you've seen over the last two decades into the next.

Yahoo!:

Boxed in by the brainiacs at Google and the massive distribution and questionable ethics of Microsoft, Yahoo! would seem to be at a slight disadvantage in the net supremacy game. However, Yahoo!'s management has matured at a remarkable rate and has an acute awareness of the behemoths they must operate against.

Yahoo! has taken a unique strategy to track movements of competitors. Employees are asked to submit tidbits of information they hear to management, and the company coalesces these nuggets of knowledge into a more comprehensive documents, which are then circulated more widely to help employees understand possible moves Microsoft and Google might make. Because they are often competing for the same talent, working with same suppliers, and receiving visits from the same companies, this "due diligence" is remarkably accurate. Yahoo! often takes meetings with companies they have no interest in doing business with just to scrape them for data about the industry and what Google or Microsoft might be up to. It's rare when Yahoo! isn't aware well in advance of moves made by Microsoft, or especially those made by their Bay Area neighbor Google.

Just knowing where your competitors are going isn't enough, of course: you still need to compete. Yahoo! is combining Internet-based services and media like nobody else. (Watch for an amazing rich web interface for Yahoo! mail that has Silicon Valley buzzing.) They've even rented the massive MGM office in Los Angeles, which gives them several hundred thousand square feet of office space to house executives moving down the coast to be close to Hollywood.

Google:

The youngest company of the bunch lacks the ferocity of Microsoft and the process of Yahoo!, but is maturing quickly. Astonishingly, three years ago some at Google believed Microsoft wouldn't be interested in their business. That naiveté was undoubtedly erased when Microsoft announced intentions to directly compete with their MSN search engine.

Google is much more focused on continuing to innovate rather than religiously tracking Yahoo! and Microsoft and countering their moves. They do have an internal ″industry″ mailing list where noteworthy news articles are distributed internally, but nothing as formal as Yahoo! or Microsoft has. Screenshots of the early versions of Vista were circulated on this list, heightening the awareness of the power Microsoft has to impede Google on the desktop.

What Google has done is open a local office right in Microsoft's backyard of Kirkland, Washington, to recruit talent. To date, they have convinced more than 100 employees to leave Microsoft and jump to Google, and virtually none have migrated in the other direction. Microsoft is fighting back and sued Google over one of those recruits. It is that lawsuit that revealed Ballmer's tantrum towards Google.

Summary:

It's impossible to predict who will ultimately prevail in the battle for the net. You can expect some nasty-but-effective tactics from Microsoft (with legal apologies and payouts years in the future). I expect Yahoo! to continue to forge media relations, which they will then leverage to build some exclusive products and services to offer their subscribers. And from Google, look for loads of experimentation and innovation in a wide range of areas seeking that next major profitable opportunity beyond the search engine.

-- Michael


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