Google is the new Microsoft

With this week’s announcement of Siri as a core component of its new iPhone line, Apple has officially staked a claim in an area that was traditionally playing to Google’s strength (search). And with recent hearings about Google’s potential for becoming a monopoly making their way through the US congress, it appears Google is increasingly finding itself in the situation Microsoft found itself in about 15 years ago.

Will Google become the new Microsoft? Today, I present the case that would answer this in the affirmative.

A branding problem

Google has become synonymous with search and that was great for the company when search was its main business but with company growth came expansion into new markets like office suites, mobile, and video, the company may have a problem explaining what it brands stands for. John Battelle put it best last April:

you could argue that Google still means a great search environment. But the brand also means far more. It’s the brand which stands in opposition to the iPhone – the Android Pepsi to Apple’s Coke. The same is true in the office suite – Google Docs are the Pepsi to the Coke of Microsoft’s Office. Google Chrome? The Pepsi to Internet Explorer’s Coke. And there’s a ton more – photo sharing, blogging platforms, social networking, ecommerce solutions, enterprise platforms, media (YouTube, Knol, etc.)….well you get the picture.

And Google = Search doesn’t cover all that.

Google has grown to be much more than search in the same ways as Microsoft in the late 1990s had grown to be so much more than Windows and Office. And it is faced with the same difficulty of highlighting what its own brand stands for.

A messaging problem

Going beyond the brand, however, is also what sits at the core of Google’s message. Google’s mission, per its corporate site, is phrased as follows:

Google’s mission is to organize the world‘s information and make it universally accessible and useful.

Under this model, where would something like Google+ fit? What about Google chat? They are social tools that provide a lot of value and should be part of Google’s offerings but neither of those tools really help organize the world’s information nor make it universally accessible and useful (for example, isn’t the whole point of circles in Google+ to limit access to information instead of making it universally accessible?)

Similarly, in 1997, Microsoft’s stated mission of a computer on every desk and in every classroom had failed to envision the rise of non-computer devices and created an on-going perception of Microsoft as a computer-centric company. While it has made tremendous inroads in the non-PC world (example: The XBox), the company still hasn’t been able to shed the image of Microsoft as a computer company, which may account for its difficulties in adapting and telling the world about its tablet and mobile devices ambitions.

So as Microsoft is mostly seen as a PC-centric company with a little extra stuff, Google is seen as a search-centric company with a little extra stuff.

Microsoft has retooled its mission statement with a noble, if hazy goal:

Our mission is to help people and businesses throughout the world realize their full potential.

To be honest, I’m not sure of how the Xbox and its accessories fit under that mission but it doesn’t matter as people have failed to even adopt this concept as embodying microsoft.

Hard time getting heard

The challenge that arises out of this messaging problem is that when new products are introduced, the early adopters have a hard time taking the effort seriously while the mainstream still looks to consume those new offerings. For example, a fair amount of skepticism has arisen in the tech community regarding Google’s effort in the social media space. Google+ was first seen as an interesting toy but soon lost the mindshare of early adopters. However, Google has opened the doors to the public and is growing its social network at an impressive pace.

That Google is failing to articulate how Google+ fits into its overall business is but one of the challenges it faces. With Facebook and Apple as the new darlings of the media and digerati set, Google’s attempt to be a more “social” company has been ridiculed by many, present company included and it has made it more difficult for Google’s nascent effort to be taken seriously.

In the same way, Microsoft’s early foray into the gaming world was seen as an odd pastime but something that would eventually be killed as only companies with names like Sony, Nintendo, or Sega could possibly understand that market. A decade later, it seems clear that Microsoft’s move was a brilliant one, putting it in a strong position in a more consumer focused market and reaping billions of dollars as a reward for that risky move.

While Apple often positions its new offerings as a radical departure from anything that existed before, companies like Microsoft and Google have been more focused on presenting their offerings as an evolution of things they’ve done before. But because people’s perceptions are grounded in the company’s respective monopolies, they have a hard time seeing the transition and dismiss the efforts as flawed.

Assaulted on all sides

The late 1990s might have been the top years for Microsoft: it had successfully completed one of the largest operating system transitions in history, and was starting to show progress on its internet effort. Internet Explorer, then in its 4th iteration, was finally seen as a serious contender to the dominating Netscape browser (at the time, Netscape commanded an 80-90% market share) and the company unveiled the XBOX in 2001. On the dark side, an on-going anti-trust lawsuit made its way through the court system, eventually forcing the company to make some drastic changes.

The next decade, however, saw the rise of web-based applications, mobiles and tablets, making the OS a less important part of the technology stack and thus pushing Microsoft to become a less crucial player in the industry.

It seems this decade will see a similar type of history repeating itself for Google.

Its search and advertising business are dominant today but Microsoft has made in-roads with Bing, its own search offering. Meanwhile, Apple may obviate the need for Google altogether with Siri as it introduced a radical new way to handle search on a mobile device (and with the majority of Google mobile searches coming from iOS devices, the search giant has to worry about this intrusion).

On the advertising front, Google’s database of intention, which leveraged search results to better target ads to consumers is being rivaled by Facebook’s social graph, which leverages what the social network knows about people and their friends to offer a new form of advertising that could be substantially more personalized than anything Google could offer. Meanwhile, other players are leveraging the information sharing of users on networks like Twitter and Facebook to get a better sense of user sentiment and target ads accordingly.

On the mobile end, Google has established its operating system as the top one by number of handsets being manufactured but risks abound as the company is looking to acquire Motorola, one of Android the device manufacturers. This acquisition will most definitely have a chilling effect (and people at some of Motorola’s competitors have said as much behind closed doors), giving Apple a chance to expand its own market share into a domineering position or giving Microsoft a chance to relaunch its mobile offerings in a way that would first make it a viable third player and eventually could lead it to become one of the top 2 players (note that Apple’s position, as far as I see it, will not be threatened).

In video, Netflix and Amazon are increasing their collections, offering quality content at a low price and therefore putting some potential pressure on YouTube. As more general content become available, it could be that YouTube will have more difficulties growing.

Then, there is the matter of being treated as a monopoly. I suspect it’s only a matter of time before someone finds a reason to bend government regulators ears as to how Google abused its power in the search business. It won’t matter whether the allegations are true (as it didn’t matter when Microsoft was accused of abusing its monopoly position), once the claims are made and the lawsuits are launched, the perception of the company as a big bad wolf will be forever cemented.

Meanwhile, Google will continue making large amounts of money (probably billions) on its current offering but may find it hard to show the general public how it is relevant today. A question regarding its future success will however find its root in whether Google can continue to be relevant in the online advertising business (it is, after all, its core business) or find new revenue lines to replace declining advertising revenue. The answer to  THAT question will define Google’s future.

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