Microsoft and Google Set to Wage Arms Race

Bill Gates, the chairman of Microsoft, described Google in an interview late last year as a worthy adversary, a company to test Microsoft’s mettle. This is hypercompetition, make no mistake, Mr. Gates observed.

The rivalry between the companies is growing more combative, and with good reason: the outcome is likely to shape the future of competition in computing and the way people use information technology.

A measure of how seriously Microsoft takes the challenge came last Thursday when it announced that its spending would rise sharply next year, about $2 billion higher than previous estimates. Much of the extra money, analysts say, is going to meet the threat from companies offering advertising-supported Internet services and software, led by Google.

Microsoft doesn’t have to kill Google, but it has to narrow the gap, said Richard Sherlund, an analyst at Goldman Sachs Company. It has to be in the same ZIP code.

To succeed, Microsoft has to make strong inroads into Internet services and software, where Google is a leader. It’s clear that if we fail to do so, our business as we know it is at risk, Ray Ozzie, a chief technical officer, warned in an e-mail memo to Microsoft employees last year.

Microsoft enters that battle from a stronghold: its lucrative, powerful business in personal computer software. Google has asserted that Microsoft’s next Web browser typically steers users to Microsoft’s search service, limiting consumer choice and potentially hurting Google, the leading Internet search engine.

Microsoft says Google’s objections are mistaken, and that its new browser, Internet Explorer 7, increases a user’s search options.

But Google has advantages of its own, and the Internet services business is very different from the desktop software industry.

The Internet model is one that offers search, e-mail, calendar, contacts and even word processing as services accessible remotely with a PC or hand-held device with a Web browser. Typically, Google invents a new service or feature, makes it a free Web-based service, and only later figures out how to make money on it from advertising of some kind.

That ad-supported software, distributed as a Web service, is a threat to Microsoft’s model of selling licensed desktop software, at least in the consumer market. Corporations have so far shown less interest in ad-supported software as an Internet service.

To smaller software companies, Google’s strategy appears to have the same competitive impact as Microsoft’s tried-and-true practice of bundling more software programs and features into its Windows operating system.

Danny Sullivan, editor of Search Engine Watch, a Web newsletter, said that in some niches of the software business, Google is casting the same sort of shadow over Silicon Valley that Microsoft once did.

You’ve got people who don’t even feel they can launch a product for fear that Google will get in, Mr. Sullivan said.

Google, he said, has acquired companies and then made their products free, roiling the markets in which they compete. Google has introduced free versions of the graphics software made by SketchUp and of the Internet analytics service from Urchin, two companies that it bought.

And Google won a bid to offer wireless Internet service in San Francisco at no charge, hoping to make money by selling local advertising. If this model proves to be successful, it could cut into the business of other Internet providers and wireless phone companies.

move directly into Microsoft’s core market. It recently acquired Writely, a Web-based word processor.

How far Google can eat into Microsoft’s software franchise is uncertain. But Microsoft fears that Google could become a kind of operating system of the Internet in the same way that Windows is the dominant operating system of personal computing.

For its part, Google wants to avoid becoming the next Netscape, a reference to the early leader in the browser market that Microsoft eventually thwarted.

A lot of the people who are at the center of Google had done hand-to-hand combat with Microsoft in the 90’s, and I don’t think they have forgotten, observed John Battelle, the editor of SearchBlog, a Web log on search technology.

The group includes Eric E. Schmidt, Google’s chief executive and former executive of Sun Microsystems; Omid Kordestani, its senior vice president for sales and a former Netscape executive; and John Doerr, a Google director and venture capitalist who was a prime backer of Netscape, Sun Microsystems and other Microsoft rivals.

They are very worried, Mr. Battelle said, about Microsoft leveraging their I.E. monopoly, referring to Microsoft’s commanding share of the browser market, which Microsoft includes in Windows.

The fears of both companies may well be exaggerated. For Microsoft, the PC promises to remain a powerful business and technology franchise for years to come. And Google should benefit from the fact that Microsoft, after a federal antitrust judgment against it and a settlement with the government, is more restrained in its tactics and behavior than it once was.

A major expense of their escalating battle lies in the very nature of the Internet services realm: the digital engine rooms and power plants that must be built to support it. Google does not disclose technical details, but estimates of the number of computer servers in its data centers range up to a million.

Last month, when reporting its quarterly earnings, Google reported a doubling in its rate of capital investment, mainly in computer servers, network equipment and space for data centers, and said it would spend at least $1.5 billion over the next year.

div style=padding:10;background-color:#DEEFFF;As Google grows, so does its need to store and handle more Web site information, video and e-mail content on its servers. Those machines are full, Mr. Schmidt, the chief executive, said in an interview last month. We have a huge machine crisis.

To catch up, Microsoft is also stepping up capital spending as it invests aggressively to build data centers worldwide. It is becoming more capital intensive, said Mr. Sherlund of Goldman Sachs. But the company has a bulging cash position and no debt. That’s not a constraint for Microsoft.

However deep their pockets and established their names, the two companies will mainly compete on one point. In the long run, Mr. Battelle said, it’s about whether you have the best service.

New York Times 2006년 5월 2일 기사

요즘들어 사이트마다 구글 페이지 인덱스가 엉망이더니 결국 구글의 장비가(그것도 저장 용량이???) 부족해서 이렇게 되었다는 말인가…? 믿을 수 없군…

포털사이트 ‘썸네일 서비스’, 저작권 위반 아니다?

재판부, 이미지 위치 알려주는데 목적있고, 해상도 떨어져 사진으로 감상 어렵다

인터넷 포털업체가 사진과 이미지 검색 편의를 위해 제공하는 엄지손톱 크기의 사진을 제공하는 ‘썸네일(thumb nail) 서비스’는저작권법 위반에 해당하지 않는다는 대법원 판결이 나왔다.

대법원은 사진작가의 작품사진들을 썸네일로 검색할 수 있도록 한 혐의로 기소된 다음 커뮤니케이션과 이 회사 콘텐츠사업본부장 임모씨에게 무죄를 선고한 원심을 확정했다고 밝혔다.

재판부는 이 서비스의 목적은 이용자들에게 이미지의 위치를 알려주는데 있는데다 썸네일 파일을 확대하더라도 해상도가 떨어져 사진으로서 감상하기는 어려운 점 등을 감안하면 이 서비스가 원본 작품사진에 대한 수요를 대체한다고 보기 어렵다고 밝혔다.

다음 커뮤니케이션은 박모씨의 홈페이지에 올라온 사진작가 이모씨의 사진작품 31점을 수집 복사해 가로 3㎝, 세로 2.5㎝ 크기로 만든 뒤 인터넷 이용자들이 검색할 수 있도록 한 혐의로 기소됐다.

노컷뉴스 기사 원문보기

YPN : Yahoo Publisher Network

드디어 시작인가보다.

그동안 미국 내에서만 추천을 통해 제한적 가입을 받았었는데 오늘부로 그 베일을 벗고 공개가 될 모양이다. 우리 나라는 언제쯤이나, 쩝…

구글이 Adsense로 PPC 시장을 평정한 후, 한동안 별다른 경쟁자가 없었는데 야후에서 드디어 칼을 뽑았다.
사실 야후가 구글에 밀리고 빼앗긴 것은 PPC 뿐이 아니라는걸 대부분의 인터넷 꾼들은 알고 있으리라… 게다가 야후는 구글과 달리 여러 파트너(오버츄어 포함, 심지어 다음까지 – 다음이 어떤 역할을 할지는 아직 미지수. 좀 더 지켜봐야지…?)와 연합 작전을 펼칠 모양이다.

어찌 보면 정말 잘 된 일이다. 사실은 그동안 구글이 기고 만장을 해서 좀 꼴사납게 보였던 점도 없지는 않다. 경쟁 없는 시장이란 상상하기도 싫다.

사람들은 아는지 모르는지 아직은 국내에서는 조용하기만 하다. 폭풍전야인가…?

아뭏든 수용씨에겐 먹구름 사이로 한줄기 내리쬐이는 실낱같은 서광과도 같은 뉴스가 될 것이다.