Google turns 11 with an eye on Microsoft

Still young, Google looks to offer viable options to Office, IE -- even Windows

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But Google's vise-like grip on the lucrative search market forced Microsoft to spend massive amounts of money to overhaul its old and unexciting Live Search tool to create a search engine called Bing, which was unveiled this summer. Microsoft went a step further by signing an agreement that calls for Internet pioneer Yahoo Inc. to use Bing as the primary search engine on its various sites.

At the same time, Google was developing its Chrome browser to take on IE, and it was looking to develop an operating system to compete with Windows.

The Chrome browser, unveiled about a year ago, hasn't hurt Microsoft yet, but Google isn't giving up. Last week, for example, Google released a plug-in called Chrome Frame that lets users embed the Chrome browser into IE. The plug-in, which is said to boost IE's notoriously slow JavaScript performance, drew a quick response from Microsoft, which warned that Chrome Frame could cause security problems for users.

Google in July announced plans to take on Windows with an open-source operating system, also called Chrome, that could run Internet-centric computers like netbooks. Chrome OS could be ready as early as the second half of next year. Many other companies have tried and failed to take on Microsoft in the operating systems business, but analysts say that Google has the financial muscle, the engineering might and the industry clout to actually put up a realistic fight for market share.

Google also moved this summer to make its hosted applications suite more attractive to large government users by announcing plans to tailor its cloud computing services for various federal agencies.

"In Microsoft's mind, Google is probably the biggest threat to their bread-and-butter operating system and desktop application businesses," said Dan Olds, an analyst at Gabriel Consulting Group Inc. "Google's dominance of the search business is also Microsoft's biggest opportunity in terms of new revenue and revenue growth. So to a large extent, the two companies are going to do battle on several fronts, which is good for consumers, as it keeps innovation high and prices low, and it's also fun to observe."

Google, with a focus on its core business along with an ingrained innovative track, is also influencing a whole lot of up-and-coming Web 2.0 businesses, according to Olds.

"The Google model of developing a killer application, optimizing it to provide high user value and gain user loyalty, and then monetizing it has been the model of choice for social networking companies. Take a look at Twitter," he said. "Google has gone from zero to industry giant in a record amount of time, starting with just a bunch of guys with a search engine to a company with a $156 billion capitalization in just over a decade. It's a company worth emulating."

Copyright © 2009 IDG Communications, Inc.

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