Google is the new Microsoft

With this week’s announce­ment of Siri as a core com­po­nent of its new iPhone line, Apple has offi­cially staked a claim in an area that was tra­di­tion­ally play­ing to Google’s strength (search). And with recent hear­ings about Google’s poten­tial for becom­ing a monop­oly mak­ing their way through the US con­gress, it appears Google is increas­ingly find­ing itself in the sit­u­a­tion Microsoft found itself in about 15 years ago.

Will Google become the new Microsoft? Today, I present the case that would answer this in the affirmative.

A brand­ing problem

Google has become syn­ony­mous with search and that was great for the com­pany when search was its main busi­ness but with com­pany growth came expan­sion into new mar­kets like office suites, mobile, and video, the com­pany may have a prob­lem explain­ing what it brands stands for. John Bat­telle put it best last April:

you could argue that Google still means a great search envi­ron­ment. But the brand also means far more. It’s the brand which stands in oppo­si­tion to the iPhone — the Android Pepsi to Apple’s Coke. The same is true in the office suite — Google Docs are the Pepsi to the Coke of Microsoft’s Office. Google Chrome? The Pepsi to Inter­net Explorer’s Coke. And there’s a ton more — photo shar­ing, blog­ging plat­forms, social net­work­ing, ecom­merce solu­tions, enter­prise plat­forms, media (YouTube, Knol, etc.).…well you get the picture.

And Google = Search doesn’t cover all that.

Google has grown to be much more than search in the same ways as Microsoft in the late 1990s had grown to be so much more than Win­dows and Office. And it is faced with the same dif­fi­culty of high­light­ing what its own brand stands for.

A mes­sag­ing problem

Going beyond the brand, how­ever, is also what sits at the core of Google’s mes­sage. Google’s mis­sion, per its cor­po­rate site, is phrased as follows:

Google’s mis­sion is to orga­nize the world‘s infor­ma­tion and make it uni­ver­sally acces­si­ble and useful.

Under this model, where would some­thing like Google+ fit? What about Google chat? They are social tools that pro­vide a lot of value and should be part of Google’s offer­ings but nei­ther of those tools really help orga­nize the world’s infor­ma­tion nor make it uni­ver­sally acces­si­ble and use­ful (for exam­ple, isn’t the whole point of cir­cles in Google+ to limit access to infor­ma­tion instead of mak­ing it uni­ver­sally accessible?)

Sim­i­larly, in 1997, Microsoft’s stated mis­sion of a com­puter on every desk and in every class­room had failed to envi­sion the rise of non-computer devices and cre­ated an on-going per­cep­tion of Microsoft as a computer-centric com­pany. While it has made tremen­dous inroads in the non-PC world (exam­ple: The XBox), the com­pany still hasn’t been able to shed the image of Microsoft as a com­puter com­pany, which may account for its dif­fi­cul­ties in adapt­ing and telling the world about its tablet and mobile devices ambitions.

So as Microsoft is mostly seen as a PC-centric com­pany with a lit­tle extra stuff, Google is seen as a search-centric com­pany with a lit­tle extra stuff.

Microsoft has retooled its mis­sion state­ment with a noble, if hazy goal:

Our mis­sion is to help peo­ple and busi­nesses through­out the world real­ize their full potential.

To be hon­est, I’m not sure of how the Xbox and its acces­sories fit under that mis­sion but it doesn’t mat­ter as peo­ple have failed to even adopt this con­cept as embody­ing microsoft.

Hard time get­ting heard

The chal­lenge that arises out of this mes­sag­ing prob­lem is that when new prod­ucts are intro­duced, the early adopters have a hard time tak­ing the effort seri­ously while the main­stream still looks to con­sume those new offer­ings. For exam­ple, a fair amount of skep­ti­cism has arisen in the tech com­mu­nity regard­ing Google’s effort in the social media space. Google+ was first seen as an inter­est­ing toy but soon lost the mind­share of early adopters. How­ever, Google has opened the doors to the pub­lic and is grow­ing its social net­work at an impres­sive pace.

That Google is fail­ing to artic­u­late how Google+ fits into its over­all busi­ness is but one of the chal­lenges it faces. With Face­book and Apple as the new dar­lings of the media and digerati set, Google’s attempt to be a more “social” com­pany has been ridiculed by many, present com­pany included and it has made it more dif­fi­cult for Google’s nascent effort to be taken seriously.

In the same way, Microsoft’s early foray into the gam­ing world was seen as an odd pas­time but some­thing that would even­tu­ally be killed as only com­pa­nies with names like Sony, Nin­tendo, or Sega could pos­si­bly under­stand that mar­ket. A decade later, it seems clear that Microsoft’s move was a bril­liant one, putting it in a strong posi­tion in a more con­sumer focused mar­ket and reap­ing bil­lions of dol­lars as a reward for that risky move.

While Apple often posi­tions its new offer­ings as a rad­i­cal depar­ture from any­thing that existed before, com­pa­nies like Microsoft and Google have been more focused on pre­sent­ing their offer­ings as an evo­lu­tion of things they’ve done before. But because people’s per­cep­tions are grounded in the company’s respec­tive monop­o­lies, they have a hard time see­ing the tran­si­tion and dis­miss the efforts as flawed.

Assaulted on all sides

The late 1990s might have been the top years for Microsoft: it had suc­cess­fully com­pleted one of the largest oper­at­ing sys­tem tran­si­tions in his­tory, and was start­ing to show progress on its inter­net effort. Inter­net Explorer, then in its 4th iter­a­tion, was finally seen as a seri­ous con­tender to the dom­i­nat­ing Netscape browser (at the time, Netscape com­manded an 80–90% mar­ket share) and the com­pany unveiled the XBOX in 2001. On the dark side, an on-going anti-trust law­suit made its way through the court sys­tem, even­tu­ally forc­ing the com­pany to make some dras­tic changes.

The next decade, how­ever, saw the rise of web-based appli­ca­tions, mobiles and tablets, mak­ing the OS a less impor­tant part of the tech­nol­ogy stack and thus push­ing Microsoft to become a less cru­cial player in the industry.

It seems this decade will see a sim­i­lar type of his­tory repeat­ing itself for Google.

Its search and adver­tis­ing busi­ness are dom­i­nant today but Microsoft has made in-roads with Bing, its own search offer­ing. Mean­while, Apple may obvi­ate the need for Google alto­gether with Siri as it intro­duced a rad­i­cal new way to han­dle search on a mobile device (and with the major­ity of Google mobile searches com­ing from iOS devices, the search giant has to worry about this intrusion).

On the adver­tis­ing front, Google’s data­base of inten­tion, which lever­aged search results to bet­ter tar­get ads to con­sumers is being rivaled by Facebook’s social graph, which lever­ages what the social net­work knows about peo­ple and their friends to offer a new form of adver­tis­ing that could be sub­stan­tially more per­son­al­ized than any­thing Google could offer. Mean­while, other play­ers are lever­ag­ing the infor­ma­tion shar­ing of users on net­works like Twit­ter and Face­book to get a bet­ter sense of user sen­ti­ment and tar­get ads accordingly.

On the mobile end, Google has estab­lished its oper­at­ing sys­tem as the top one by num­ber of hand­sets being man­u­fac­tured but risks abound as the com­pany is look­ing to acquire Motorola, one of Android the device man­u­fac­tur­ers. This acqui­si­tion will most def­i­nitely have a chill­ing effect (and peo­ple at some of Motorola’s com­peti­tors have said as much behind closed doors), giv­ing Apple a chance to expand its own mar­ket share into a dom­i­neer­ing posi­tion or giv­ing Microsoft a chance to relaunch its mobile offer­ings in a way that would first make it a viable third player and even­tu­ally could lead it to become one of the top 2 play­ers (note that Apple’s posi­tion, as far as I see it, will not be threatened).

In video, Net­flix and Ama­zon are increas­ing their col­lec­tions, offer­ing qual­ity con­tent at a low price and there­fore putting some poten­tial pres­sure on YouTube. As more gen­eral con­tent become avail­able, it could be that YouTube will have more dif­fi­cul­ties growing.

Then, there is the mat­ter of being treated as a monop­oly. I sus­pect it’s only a mat­ter of time before some­one finds a rea­son to bend gov­ern­ment reg­u­la­tors ears as to how Google abused its power in the search busi­ness. It won’t mat­ter whether the alle­ga­tions are true (as it didn’t mat­ter when Microsoft was accused of abus­ing its monop­oly posi­tion), once the claims are made and the law­suits are launched, the per­cep­tion of the com­pany as a big bad wolf will be for­ever cemented.

Mean­while, Google will con­tinue mak­ing large amounts of money (prob­a­bly bil­lions) on its cur­rent offer­ing but may find it hard to show the gen­eral pub­lic how it is rel­e­vant today. A ques­tion regard­ing its future suc­cess will how­ever find its root in whether Google can con­tinue to be rel­e­vant in the online adver­tis­ing busi­ness (it is, after all, its core busi­ness) or find new rev­enue lines to replace declin­ing adver­tis­ing rev­enue. The answer to  THAT ques­tion will define Google’s future.