Google’s Success a ‘Wake Up Call’ to Microsoft
Microsoft was left shaken and stirred with the way Google Inc. increased their advertising revenue. Microsoft’s top technical executive, Ray Ozzie said, “was a wake-up call within Microsoft”. However, Ray said that they do not plan to copy Google and plan to come up with something that is their own innovation.
But Microsoft has yet to offer a cohesive package of programs that run over the Internet instead of from a PC. Ozzie gave little indication of what might be coming, or when. Meanwhile, Google has expanded beyond searches to offer free, Web-based programs similar to Microsoft’s mainstays, Word and Excel. Ozzie said Word, Excel and other parts of Microsoft’s "Office" suite have weathered threats from both desktop and Web-based programs in part because competitors always compromised functionality. For example, he said, users always have to be connected to the Internet to use a Web-based word processor.
Instead of jumping belatedly into the fray with Web-only programs, he said Microsoft will pursue a mix of software loaded on PCs and Internet services that also work with the growing array of mobile devices, a strategy he called "software-plus-service." He said he sees free, Web-based, ad-supported software as a way to extend Microsoft Office’s reach, but gave no specifics. He noted that this solution wasn’t likely to appeal to the company’s big business customers.
Sid Parakh, an analyst with McAdams Wright Ragen in Seattle, said that "what he’s trying to say is that even though we are behind, we are not going to necessarily copy a model that’s out there."
The US search market trends have indicated that Microsoft is stuck in the third place after google and Yahoo! for sometime now. Even Microsoft shares came down $1.20, 4.1 percent, to $27.87 on the Nasdaq Stock Market.