Can Microsoft ever buy Google's "cool factor?"

Posted May 8th 2007 6:07PM by Brian White
Filed under: Rumors, Competitive Strategy, Google (GOOG), Microsoft (MSFT), Yahoo! (YHOO)

Although it is doubtful that Microsoft Corporation (NASDAQ: MSFT) will buy Yahoo! Inc. (NASDAQ: YHOO) (after rumors last week), what can the software giant do to try and take some of the "cool" factor away from competitor Google Inc. (NASDAQ: GOOG)? Google has succeeded by providing products that work very well and are suited towards the customer and nobody else (not the advertiser). Google makes money using unobtrusive advertising tied to some of its online products (mostly Internet search). This "unobtrusive" model works just as well as Google's products, which explains its rapid rise to popularity.

Microsoft and Yahoo!, for their respective parts, have morphed their online business models a bit to try and reach for some of that advertising revenue that Google pumps in every quarter. But, the two companies can't just abandon established identities and copy Google. Or, could they?

Microsoft was late to understand that the shift to online services was taking place (as opposed to local computing), and other companies (like Google) turned that misstep into a huge competitive advantage. Is Google too far ahead of both Microsoft and Yahoo! for either company to ever catch up? That's debatable, but right now, the solid answer would be "yes."

Yahoo! still places a premium on advertising placement (which annoys customers) over content, while Google places advertising in a way that doesn't alienate the consumer (and it works, amazingly!) and has superior Internet products from many measures. Microsoft has just been plain late with too many web products, although chief software architect Ray Ozzie is changing all that. Is it too little, too late for Microsoft when put up against Google, though? Rumors of the software giant pursuing Yahoo! just to catch Google shows that time is slipping away

Tags: GOOG, Google, Microsoft, MSFT, Yahoo!, YHOO

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Reader Comments (Page 1 of 1)

5-08-2007 @ 2:41PM

Sheldon L said...

There is no time in MSFT history that it ever had the cool factor. Even during it's highest growth periods. Perhaps the stock was charmed from an investor perspective, but the company, never.

It can't buy it. Perhaps if they separated XBOX from the rest of the company there might be a chance but otherwise they cannot buy it.