Live Search Pushes onto Google Turf

Microsoft has lost the search battle on the desktop, but mobile is still up for grabs—even with Google there having 60 percent market share, according to ComScore. Google’s success comes from a small base of mobile data users. There is plenty of room for Microsoft to gain traction.

mobile1008a.jpgThat makes the Verizon deal important, and timely. The conclusion of Verizon’s Alltel acquisition makes the carrier the largest in the United States. Microsoft has the right partner. But there is some lag between announcement and availability of Live search on Verizon phones. The companies have given a broad target of the first half of the year. The five-year agreement also covers advertising, presumably which Microsoft will deliver to the phones.

The question: Will this deal set off a race to lock in other carriers? I have to say yes. Google can’t solely rely on Android and Chrome to keep mobile search high. Besides, Verizon has slapped Google in the face here. Hard. My Google Watch colleague Clint Boulton asks: “Is Google’s hunger for more Internet users biting it in the behind?” He cites Google’s spectrum interference, which forced Verizon to make an unwanted $4.7 billion bid to win.

“I can’t help but wonder if Verizon’s deal with Microsoft is a little old-fashioned payback,” Clint writes. “Why else would Verizon partner with what many consider is an inferior search product to Google?”

I think that Google has started to get too big for its britches, making the company look more like Microsoft did in the late 1990s. Back then, Microsoft’s browser and operating system dominance caused fear and trepidation among some partners. Businesses that have been there, done that with Microsoft won’t want to do it again with Google.

Recent Google bundling tactics are oh-so past Microsoft. Clint posted not once, not twice, but thrice on the topic of Google evil related to product and services bundling. He writes:

Google’s creation of Chrome means the company has jumped the shark of innocence. Rail about the philanthropic unit all you want, but I think Chrome exposed Google for the power-hungry machine many of us knew it was. Chrome effectively put Google in Microsoft’s league, just on the Web instead of the desktop.

Google is becoming Microsoft at a time when Microsoft is becoming something else. For starters, Microsoft is the search alternative—and one less threatening because of low market share. Microsoft is unbundling its Web-based products from Windows just as Google steps up bundling, particularly around Chrome and Gmail.

mobile1008b.jpgAll companies go through similar growth patterns. At one time, Microsoft was the scrappy startup with cool brand association and popular products. But Microsoft grew older, more arrogant and power-hungry. Today, the more middle-aged Microsoft has started to take more of a leadership role among technology companies. Sure the company has plenty of flaws, but there is a maturity that Google lacks.

Google is in the process of moving from that young, loved company into arrogant adulthood. The similarities between Google and Microsoft at similar stages of development, starting with monopoly, are striking. Like Microsoft, Google can’t resist bundling and tying products together, leveraged off of search. What Google is today with search, Microsoft was with operating systems 15 years ago.

The point of all this Google rambling: Microsoft is in a position to make friends where Google is making enemies. To Microsoft, Google lost Verizon and Dell, the latter which Google already had. That’s a deal Microsoft snatched away from the search and information company.

Microsoft’s long success is built on partnerships, particularly with OEMs. There, Microsoft is finally walking away from its arrogant ways, which maybe is some explanation for its success wooing Dell. During the 1990s, Microsoft treated OEMs like they needed Windows to succeed, and the company used some aggressive pricing tactics to get the operating system everywhere. Compare that attitude of the past to last night’s Consumer Electronics Show keynote, where Microsoft CEO Steve Ballmer acknowledged: “Windows is really nothing without the innovative hardware that it runs on.” Chairman Bill Gates wouldn’t have said that during the 1990s.
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