Google turns 11 with an eye on Microsoft

Eleven years ago, Larry Page and Sergey Brin founded Google Inc. with a search engine and a plan. Now their company has grown into an online behemoth battling head-to-head with industry giant Microsoft Corp. while the term Google is a verb that means Internet search.

Obviously, a lot has changed for the company and its founders since Sept. 27, 1998.

Google celebrated its anniversary this year quietly, doing little more than changing the famed doodle on its search page from the usual Google to Goog11e .

But whether it celebrates its birthday or not, Google is one of the great Internet success stories to date. The company not only owns the search market with a share of more than 64%, it has branched out over the years with its hosted Google Apps applications like Gmail along with Google Maps , Google Earth and other products.

More recently, Google has moved to take on Microsoft and its widely-used Internet Explorer in the browser business, and even disclosed plans this summer to develop an alternative to the Windows operating system. Just yesterday, Google announced plans to release an early version of its Google Wave collaboration tool to 100,000 users and developers for testing.

"I would say Google is the most influential Web company out there," said Ezra Gottheil, an analyst with Technology Business Research Inc. "It's rare to have a company grow like that, but we've seen others. It's just that the others either flamed out, were acquired or haven't yet reached a sustainable state. Look at Netscape, MySpace, Twitter, Youtube and Facebook."

Caroline Dangson, an analyst with IDC, noted that in a survey undertaken by the research firm last year, Google was easily the top consumer brand.

"We have found that with consumer surveys, [Google] is the number one consumer brand," she added. "We conducted a survey including Yahoo, MSN, eBay, Amazon ... different consumer Web properties. Google was number one for all of our questions, from 'How much do you like the brand?' to 'How much do you use the brand?' to 'How much do you trust the brand?' There are few companies that are able to grow and dominate in this way."

Google has grown to the point where it's become a threat to Microsoft , which has had a long and storied history of high-tech industry dominance. There was a time not so long ago when few believed that any company could rattle Microsoft, let alone a Web company like Google .

But Google's vice-like grip on the lucrative search market forced Microsoft to spend massive amounts of money to overhaul its old and unexciting Live Search engine to create 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 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 the company 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 browser's notoriously slow JavaScript speed, drew a quick response from Microsoft , which warned that it 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 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 with The Gabriel Consulting Group. "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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