Google's 10 toughest rivals

Apple, Microsoft and IBM among tech firms poised to ramp up competition with Google in 2010

The biggest tech industry news story of the decade was undoubtedly the dramatic rise of Google. But will the search and online advertising juggernaut continue its dominance over the Internet economy in 2010? Not if the tech companies on our list can help it.

Until now, Google's biggest frenemies were the traditional media: newspapers, magazines and TV stations that create online content Google searches and that buy online advertising from Google. But as its portfolio has grown to encompass more than 150 products -- including free, hosted versions of popular software applications -- Google has attracted an array of tech industry competitors.

[Also see: 10 cool things you didn't know about Google]

Google's rivalry with tech firms is likely to get more intense in 2010. In Google, tech firms are up against the Internet's most-trafficked Web site and a money-making machine. Google is poised to rack up more than $23 billion in revenues in 2009, with margins over 30%. With its huge cash reserves, Google has money to buy innovative start-ups -- including recent purchases of On2, ReCAPTCHA and AdMob -- to keep itself at the cutting edge.

Here's Network World's list of 10 tech vendors that are likely to shape up as Google's biggest rivals in the year ahead and the areas in which they will compete hardest:

1. Amazon

On track to rack up $22 billion or more in sales this year, Amazon has the financial wherewithal to battle Google in e-books and cloud computing. Indeed, Amazon CEO Jeffrey Bezos is a true frenemy of Google's, having been one of the search firm's initial investors back in 1998.


Analysts agree that 2010 is shaping up to be the battle of the e-books.

Since 2002, Google has been scanning millions of out-of-print books and incorporating them into their online search service. Google's e-book efforts picked up momentum in 2009 as Google made 500,000 digital books available free to customers of the Sony Reader and Barnes & Noble Nook, which is due in January. In October, Google said it was opening up an e-book store called Google Editions that will allow customers to buy and read electronic books on any device with a browser.

With e-books, Google is taking on Amazon, whose Kindle e-book reader has a commanding lead in the market. The Kindle is the best-selling item at Amazon's Web site, which is now offering more than 360,000 e-books in its Kindle store. Amazon said in December that it would release a free Kindle book reading application for BlackBerry users, which will complement a similar application for PC users.

Cloud computing

The other main area where Google is taking on Amazon is in cloud computing, a market that is poised for significant growth in 2010.

In April 2008, Google debuted its Google Apps Engine, which is a cloud computing platform that allows developers to create their own Web applications and run them on Google's infrastructure. Users pay for the amount of compute, storage and bandwidth resources that they use. In April 2009, Google added features to make its cloud computing platform more attractive to enterprises.

Amazon's Elastic Computing Cloud (EC2) pay-as-you-go compute service was released in 2006, and it has been upgraded several times, including the addition of load balancing, auto scaling and monitoring services. In December 2009, Amazon added Symantec's security and storage offerings. Usage of EC2 is on the rise with business customers , who find it a low-cost way of handling bursty network traffic although security concerns remain.

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