United States: Microsoft to Google: Checkmate

Memo to Bill: Change the Rules of the Game

The most highly anticipated event of the year in the business world was made official on April 29, 2004 – Google filed with the SEC (SECURITIES AND EXCHANGE COMMISSION) and is going public.

You’ve heard the optimistic rhetoric: "This could change Wall Street again." "This is the shot-in-the-arm our economy has been waiting for." "This could change EVERYTHING."

I am going to tell you what this means – nothing.

Google, just like any good corporate citizen, wants to maximize profits, become a household name and grow their marketshare to the point of market dominance. Even though they are still privately held, for all intents and purposes let’s refer to Google as a corporate citizen, because by sheer marketshare they are one: over 200 million people use Google daily.

Let us look at Google objectively. Google is a search engine. It is a resource for everyone with their news service (not a unique offering in the market), their news alerts (not unique…), their online market Froogle (not unique…), their image search (not unique…), their groups (not unique…), their toolbar (not unique…): I believe the picture is becoming very clear and one that is evident: Google is doing the same thing that their competitors are doing (Yahoo!, MSN, AOL, Lycos, Overture, AltaVista, Dogpile, etc.) but using their clout as "Apex Predator of the Search Engine Universe" to create a successful distraction from the rest of their modules/offerings, which are just as plagued with infancy and learning curves as their competition’s.

Google then by definition is another search engine, but one that has gotten the attention and media coverage it has always wanted by remaining privately-held, displaying market dominance, and ultimately leveraging the momentum of those two factors into being a tempting financial plum, ripe for public consumption.

Let us never ever forget history.

Wall Street cannot afford to be that stupidly greedy again. Another bubble and this one will not only burst, but the fallout will be radioactively catastrophic and forever tarnish the association of Wall Street and any Web site filing for an IPO. Fool me once, shame on you – fool me twice, shame on me.

"Reduce the hostile chiefs by inflicting damage on them and make trouble for them, and keep them constantly engaged; hold out specious allurements, and make them rush to any given point."

Should Microsoft take the wisdom of Sun Tzu, they can, with relative ease, scatter and confound the marketplace’s main players and continue laughing all the way to the bank. The tactical deployment of Microsoft’s next key strategy requires the top brass to reflect upon the corporation’s desired lifespan: they now stand at that threshold.

Google only exists online. Microsoft needs to exist only online. You best go to Rome and light the match yourself, Bill – and make haste. Don’t forget to BRING YOUR OWN GASOLINE – swift movement and acceleration is critical. Sun Tzu also recommends that you do not prolong a war, especially in another’s country.

Google is virtual yet tangible on a Web browser – Microsoft is both AND omnipresent. Once Microsoft successfully duplicates that model of everything online accessible by a browser, Bill will then have the ultimate upper-hand: complete and utter dominance of the Web – and the world.

Move over everyone. Watch out.

Microsoft is currently in the position to start focusing their marketing and development on porting all of their applications, development environments – EVERYTHING THEY SELL AND USE - online and Web accessible instead of worrying about multiple software releases for various platforms. That move alone successfully eliminates:

1. Piracy

2. Version control inconsistencies – everyone uses the same application

3. Cross-platform compatibility issues

4. Competition

With the advent of highly accessible broadband connectivity, Microsoft is also in the position to allocate large portions of their quarterly budgets to infrastructure (i.e. fiber optic networks, nationwide at first) instead of development, as that process will have naturally been scaled down to appropriate levels by fulfilling part one of the equation and having all of their services online. If Google is your target and they only exist online, you have to do likewise: go online until Google is associated with a mathematical term again instead of a search engine.

Star Trek, love it or not, gave us incredible insight into modern-day living. The late Gene Roddenberry foresaw the cell phone, visual tele-conferencing and small hand-held devices that were both miraculous as well as lethal, if used incorrectly. The Internet was also part of his vision in the form of a centralized database (Starfleet’s Universal Data Records) and user terminals (what Spock would be constantly monitoring with an uninterruptible connection to the database.)

Microsoft can do the following to change the rules of the game forever:

1. Get Intel to step up production - especially for banks and banks of servers to power the increased and immediate demand for all of Microsoft’s Online Services and Applications.

2. Issue new, insanely inexpensive terminal-based systems designed for broadband connectivity to Microsoft’s Online Services and Applications using Intel’s best technology.

3. Invest in broadband infrastructure (both fiber optic and wireless).

4. Take the investment of the broadband infrastructure and level the playing field in a drastically brilliant manner by providing an entirely new suite of services. Applications, multiple Windows operating systems to choose from, unlimited storage (pay-per space allocation – i.e. 80 GB of space costs $5.00 a month.)

5. Take the MSN subscription model 10 steps further: design and allow for recurring revenue streams based upon which online application is used (i.e. if you used MS Word for 14 hours that month, you’d be billed $2.25 – etc.), or you can simply pay a flat-fee for unlimited usage on a monthly basis, or tell Microsoft you still would rather buy it and own it. This comes down to meeting individual needs on the broadest scale possible. Microsoft would then eliminate the consumer’s complaints of it being "too expensive" if they only need it for a few hours a month or year. Nevermind 200 million people searching your free database daily – think of BILLIONS of people using Word for ten cents an hour for a month instead – think of that $2.25 multiplied by 200 million a day alone. That is enough cashflow to begin recouping instant ROI on the infrastructure and online application porting costs. This course of action will change the world.

This kind of thinking can be implemented immediately. Microsoft has the resources and personnel on a global scale to change the rules of the game VERY quickly. By no means should PC manufacturers stop customizing state-of-the-art home systems – those will always be in demand by other industries and consumers alike.

This new approach of porting everything online is one that will not take a generation’s passing to accept: in our break-neck speed of technological discoveries, this could all be implemented within 3 to 5 years - easily. AOL and many existing services will die painfully, quickly and secretly should Microsoft completely change the rules of the game.

Microsoft is still playing by the established rules - which they’ve made and continue to do so – on almost every PC in the world. Bill Gates and his friend Steve Jobs are both visionaries whose combined dreams have given us today’s PC. Bill and Steve would be very wise to sit down and discuss how Apple, who has a major install base in the Entertainment/Marketing/Music Industries, can begin tailoring their business model accordingly to reap the same rewards as Microsoft and meet the needs of everyone.

Giving consumers the option of "Everything Online" as well as today’s dated software distribution model will be the inevitable bridge that our collective technology must cross. One man can do it if he decides to.

It is in the best interest of Microsoft, Apple and the rest of the world for a renewed focus upon distribution models and how recurring revenue streams based upon today’s offerings (MSN subscription services, iTunes, etc.) can be turned into tomorrow’s best practices on every level.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.