Google and Microsoft to escalate war in 2010

The two behemoths will battle over search, operating systems, enterprise applications

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Microsoft has more reason to hope that Bing will take a significant chunk out of Google search since the company announced plans over the summer to team with Yahoo Inc., which holds the second-place spot in the search market - nestled snugly between Google and third-place Bing. The deal, which still has to be approved in the U.S. and in Europe, would have Yahoo give up its own search technology to use Microsoft's.

Pooling their resources and industry might, the two companies hope to do together what neither has been able to do alone - significantly make gains on Google's ubiquitous search.

The search battle heated up this fall when both companies announced they had struck individual deals to serve up real-time search results. Microsoft will be offering users real-time tweets from Twitter and posts from Facebook, while Google has already begun working with Twitter to offer up tweets in its search results.

But this fight extends beyond search.

Google pushed hard this past year to move its cloud-based office applications into the enterprise. Taking on Microsoft's ubiquitous Office applications was a bold move that could prove lucrative if it succeeds. Microsoft, however, isn't sitting back and watching Google move into that territory. The company announced this year that it plans to move its Office applications to the cloud and take on Google head-to-head.

The Google/Microsoft fight also extends into the browser arena with Google Chrome going up against Internet Explorer. Google also announced that it's working on the Linux-based Chrome OS operating system, which, if widely adopted, could help users see Google's Apps offering as a viable alternative to Microsoft's Office suite.

"This battle was always looking like a long-term conflict," Olds said. "It's the equivalent of high-tech trench warfare. In 2010, we can expect to see the bitter competition continue, with each company keeping up the heat with new features and innovations."

McGregor noted that the next 18 to 24 months are looking to be fun to watch with the two giants pulling out all the stops, and all their weaponry, to try to take down the other.

He added that the search market should expect to see a greater focus on real-time search and more advanced algorithms designed to help the search engines figure out what people are thinking and how to give them more information. For instance, instead of searching for pet stores and getting a list of stores in a certain area, users might be given a list of stores along with directions on how to get to each one from their current location.

Rob Enderle, an analyst with the Enderle Group, said we're likely to see more industry players, such as Apple Inc., Mozilla Corp. and News Corp. aligning against Google.

"Both companies are largely betting their collective futures on this battle so the stakes are huge," Enderle said. "Microsoft is going to partner and try to starve Google out of content and partners. Google is going to work against Microsoft's pricing model and starve them out of money. Both are, for once, largely going after each other's relative weaknesses and leveraging their respective strengths, so this will likely be a battle for the history books."

Sharon Gaudin covers Internet and Web 2.0, emerging technologies and desktop/laptop chips for Computerworld. Follow Sharon on Twitter @sgaudin, send e-mail at or subscribe to Sharon's RSS feed .

Copyright © 2009 IDG Communications, Inc.

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