How Microsoft can 'kill' Google

Discussion in 'News and Article Comments' started by syngod, Sep 22, 2005.

  1. syngod

    syngod Moderator

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    When Steve Ballmer yelled at a departing Microsoft employee that he would “kill Google” we had no idea just how direct a method he had in mind. Buying all or part of AOL may be the first part of the master plan, as Google relies heavily on the advertising pages that come from Yahoo!, since it now syndicates its search to Google.

    One estimate suggested that Google would lose as much as $380m of advertising revenue if AOL dropped its search engine and took on MSN's. That would cut Google’s profit by something like 25 per cent, potentially giving its huge share price something of a tumble. No wonder Google is thought to be entering the bidding to partner with Time Warner on AOL instead of Microsoft.

    However, the move by Microsoft could still potentially backfire, although with its cash mountain you would expect it to win the day. Google only chance is to paint a sufficiently rosy future picture to Time Warner’s management about what kind of outcome there would be for an AOL partnering Google, then perhaps a lot more than that $380m could be saved.

    For instance the new physical fiber network that Google is believed to be in the process of putting together, be used to transport more than just voice, advertising and wi-fi traffic. This could also become a conduit for video services, providing another route to market for the remainder of Time Warner’s content? Could the Google Video search capability index all of Time Warner’s precious content and give it another lease of life?

    It’s too late for the Google Talk VoIP service to go out to all the AOL customers because AOL has launched its own complete VoIP package service. The AOL Time Warner merger had some original logic and perhaps a company as imaginative as Google could make that logic work.

    On the other hand Microsoft in June 2003 paid Time Warner $750m, mostly in settlement of legal disputes, from when AOL inherited the complaints of Netscape when it bought that company right in the middle of the Microsoft anti-trust trial. But the deal also gave AOL rights to use certain Microsoft tools and the two said that they would collaborate on long-term digital media initiatives, some of which they are well into.

    That agreement was certainly not a mere settlement of differences but included the Free use of Internet Explorer by AOL for seven years, collaboration on Windows Media player and DRM software and early access to Microsoft technology for AOL.

    And since then the two companies, Time Warner and Microsoft, have become almost inextricably interlinked, working together on standards and buying into companies like ContentGuard together.

    So Microsoft must be ahead on this deal as it comes to the table and has the money to tempt Time Warner.

    The New York Post has been painting the deal as if it was a 50-50 partnership, with Microsoft buying half of AOL with other statements suggesting that the deal is nothing like that adventurous and is just a form of marketing co-operation.

    Yahoo! also has time to throw its hat in the ring, and discussion between it and Time Warner has also been reported. AOL has been losing subscription customers rapidly, which is why it recently switched its business from purely subscription based to increasingly advertising-based.

    Source: The Register
     
  2. Anti-Trend

    Anti-Trend Nonconformist Geek Staff Member

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    Why would anyone want to kill Google when they could just compete with them on a product level? Oh, that's right, that's been Microsoft's business plan all along! "Kill, crush, maim, absorb competition until there is none left. US economy? Bah. Are we a predatory monopoly? A convicted one. But we won't that stop us!"
     
  3. Addis

    Addis The King

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    Killing off companies like that shows their incompetence to compete with them with their own innovative products. IMO Ballmer seems a bit of dickhead.
     
  4. ninja fetus

    ninja fetus I'm a thugged out gangsta

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    I'm with ya!

    ... :ff: !
     
  5. Nic

    Nic Sleepy Head

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    Me too:ff: :ff:
     
  6. Matt555

    Matt555 iMod

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    You got me as well :D
    :ff:
     
  7. Anti-Trend

    Anti-Trend Nonconformist Geek Staff Member

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  8. Matt555

    Matt555 iMod

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  9. WWR

    WWR Ultra Geek

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  10. Anti-Trend

    Anti-Trend Nonconformist Geek Staff Member

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    Steve Ballmer may be an easy target, and frankly I hate his guts. But we're getting off track here. Let's focus more on Syngod's article, eh? :)
     
  11. Willz

    Willz MiCrO$oFt $uK$ :D

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    There is one good thing that could come out of this plan, AOL could get better!, as microsoft could do alot to AOL :good:

    in my opinion, it would not hurt to see google killed off, msn, and even aol search is better, i know aol search is power by google, but its better some how, the only good thing about google, is google earth, when oyur searching on google, there are more results on google that are total rubbish, than with any other search engine.
     
  12. Anti-Trend

    Anti-Trend Nonconformist Geek Staff Member

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    Wow, I don't know where you got that from, but you're the first person I've ever seen talk like that. In my experience, google has far less garbage than MSN, Yahoo, or any other prevalent search engine.
     
  13. Addis

    Addis The King

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    No seriously I've tried MSN search a few times, and when I use google, the first result is always more relevant than the first on MSN. Also google has lots of cool features which tell you the answer to life, the universe and everything. It also tells you latest stock market changes instantly (google AMD and INTC). Yet with this it doesn't get bloated as MSN does.

    Would you rather use a superior search engine with a simple lean and fast interface than a less relevant one with loads of crap with it. Would you really go on www.msn.co.uk and load up all the miscellaneous crap just to use the search tool? I woudn't.
     
  14. Matt555

    Matt555 iMod

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    good point there addis, i've used many other search engines on the net and imo google is by far the best, i agree with you when you say that there's no point loading up all the pictures and other crap just to use the search engine, i would rather use a search engine that is just a search engine and not loaded up with news, gossip, celeb stories, weather, etc etc
     
  15. syngod

    syngod Moderator

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    MS taking out Google may not be the best thing but it's business and when your sitting on 40 billion worth of cash why not use it to take out your competitors. Besides if they do acquire AOL it make their MSN service that much stronger which should make shareholders happy.

    Would anyone seriously say if they owned a business and had a chance to take out or severly hurt a major competitor you wouldn't jump on the opportunity?

    If Google had stayed in the search firld they may have been ok but now that they're trying to get their hands into almost everything like MS has I think they're going to start running into difficulties. After all a $4 billion war chest vs. a $40 billion war chest is going to be quite a feat to overcome.
     
  16. Willz

    Willz MiCrO$oFt $uK$ :D

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    i wonder what will become of aol if microsoft takes over, i wonder if aol will turn into a great service, with software that does not trash your computer and os.

    that would be great :D............
     
  17. syngod

    syngod Moderator

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    Chances are it would just be merged into MSN. That way the MSN division picks up AOL's subscriber base plus MS can combine AOL's content with MSNBC and Fox Sports and pretty much have an online media powerhouse that could in the long run end up hurting Yahoo as well.
     
  18. Anti-Trend

    Anti-Trend Nonconformist Geek Staff Member

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    What is difficult for me to understand isn't why MS would make such a poor decision, but why you would cheer them on in such a decision. I can see that since you are Canadian, Google (or any other MS competitor) being "killed" by predatory monopolistic tactics wouldn't directly affect your economy much. However, it does harm my economy, and it's a totally unnecessary (and illegal) business practice. Furthermore, if you take a look at the big picture, I think you'll find that it harms your economy in the long run also. Not to mention the long-term affect on competition and innovation in IT -- MS has a clear track record for stagnation without fierce competition driving them. I mean, look at the last 3 releases of Windows: all based on the same version of NT!

    It's easy to justify the bad bahaviour of another by rationalizing it away to pure greed. As you said, "Would anyone seriously say if they owned a business and had a chance to take out or severly hurt a major competitor you wouldn't jump on the opportunity?" My answer to you is no, I would not. I would try and improve my own business practices rather than trying to outright eliminate my competitors. The driving force behind a capitalist market is and has always been the consumer, not big business. Lately however, MS and the **AA's have tried to herd consumers into changing their preferences to suit big business instead of vise-versa. When other (smaller) business tried to meet that need, the big guys stomp their guts out. Ideally, when corperations die off, it's because they can't keep up with customer demand and become obsolete. Or perhaps that another company could provide a superior product or service and the consumer voted with their pocketbooks. This is certainly not what is happening here. The problem with megalomaniacs is that by definition, they don't know when to stop.

    -AT
     
  19. syngod

    syngod Moderator

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    I'm not for it as the first part of my post was it

    I'd rather have Google around but Microsoft is a publically traded company and has to account to it's shareholders. If Google keeps moving into more and more fields that compete with MS and end up causing Microsoft to lose revenue shareholders are going to be upset, especially if they knew there was a way Microsoft could have avoided it in the first place.

    From a business and shareholder standpoint buying AOL is a move that makes financial sense as it bolsters their search and adds quite a few subs to their MSN division and helps keep a competitor in line from trying to cut into their revenue stream.
     
  20. Anti-Trend

    Anti-Trend Nonconformist Geek Staff Member

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    This is something I've been trying to get across to my MS-fanboy friends for years now. It's not about playing cheerleader for one company or another, it's that healthy competition brings about big-picture improvements that ultimately benefit the consumer and even the economy. If MS (or any other large corperation) is allowed to dictate the course of IT in their favor, it's good for them and their shareholders and very bad for everyone else (even MS fanboys). If they have foresight, fans of MS should be cheering on FOSS and any other strong and long-standing competition to the Redmond behemoth. At the very least they will serve to light a fire under MS to innovate and to improve the overall quality of their offerings.

    -AT
     

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