Thanks to the pending launch of MSFT’s search technology, today the press is full of easy comparisons – “Is Google the Next Netscape?” is a typical headline. The mainstream press has just woken up to the “Microsoft is going to crush its competition” meme, and it’s tiring to see this easy thinking splayed all over the mediasphere.
But let’s get one thing straight, for once and for all: Google ain’t no Netscape. As many have pointed out, it’s looking more and more like the next Microsoft, in terms of business model, talent, and riches.
If Bill Gates had a magic shaving mirror, one that showed him 20 years younger and in fighting shape, he’d probably peer into it and see the image of Larry Page or Sergey Brin. Microsoft is indeed a fearsome competitor, with extraordinary resources (and I don’t mean the $50 billion in cash, I mean the ability to leverage Windows). But it’s a middle aged company that moves far more slowly than it did ten years ago, when it first recognized the Web threat. And even if it wants to move, which I am sure it does, it’s uncertain as to which way to go: it’s got a massive legacy to protect, and an uncertain path forward.
Back in 1995, MSFT faced a small company with barely any revenues and a product that, while innovative, was hardly rocket science to recreate. The internet was still a new concept and users had almost no brand loyalty, and a pretty ingrained sense that the only major player out there, besides AOL, was inevitably going to be Microsoft.
Now let’s take a look at today. Microsoft faces an enormous chasm crossing moment: Windows is becoming simply another layer in the Internet application stack, eroding its lock in leverage over time. (I’ve taken to saying, probably far too casually, that Windows is to the Internet as DOS was to Windows). And Google? They’ve got hundreds of thousands of servers around the world running a proprietary, Linux-based operating system that serves up billions of queries a month, and is now being adapted to serve mail, blogs, photos, satellite images, and Lord knows what else. Google has a very distinct *architecture* advantage, not just a brand and user loyalty advantage (though it has that as well).
I’m not saying that MSFT (or AOL, or Yahoo) can’t prosper in this space, or even “win” in the long term. But crush Google a la Netscape? No friggin’ way. The only thing that can kill Google is Google itself, either through growing too fast, managing too poorly, or failing its customers in some catastrophic way.
What do people think about the Web 2.0 generation battle being Google-as-Apple vs Yahoo-as-Microsoft? Not from a technology platform perspective at all (because Google is not a proprietary platform) but rather from a management style and psychological perspective. Google has one friggin great product — best in class. Just like Apple in the early days. And they’re working on several others. But from what I hear from people who try to work with them (note to all Google-ers I may run across in the future, that this is ALL second-hand info…I have no carnal knowledge of this myself) is that Google is so focused on engineering innovations and not on effective management that its chaos over there. Just like Apple in the early days. Don’t get me wrong…chaos is good in certain circumstances, it often fosters the most creative innovations. But it carries a higher risk than the public markets usually like to absorb.
Yahoo, on the other hand, is a well-run business. They are aggressive and fast-moving, but its not chaos. They have great engineering and innovative, risk-taking managers, but they keep it in the right context of an appropriate balance between managing for both near-term and long-term shareholder value. Similar to MSFT in the early days.
I’m not saying that Google-as-Apple will lose as Apple did…on the contrary there is a decent chance they may win because the randomness associated with chaotic innovation cuts both ways. Sometimes the dice roll your way, sometimes they don’t. In Apple’s case it didn’t and MSFT crushed them for a while until their chaotic innovation culture (led by Jobs) produced some new winners in the last few years.
Thoughts from anyone else who is closer to these two companies…does this analogy have merit?