Google, Inc. (NASDAQ: GOOG) was born eleven years ago as more of an experiment, and exceeding anything founders Larry Page and Sergey Brin could have ever imagined. That company -- just over a decade old -- is now poised to challenge the world's largest software company -- Microsoft Corporation (NASDAQ: MSFT) -- as the leading supplier of digital information flow for countless individuals and companies.

Now that Google, Inc. (NASDAQ: GOOG) has announced a new computer operating system, which computer makers will inevitably start looking at in 2010, the first volleys have already been fired. Taiwanese PC maker Acer, Inc. has already committed to Chrome (that was fast), and the world's largest PC maker -- Hewlett-Packard Corp. (NYSE: HPQ) -- is "looking" at Chrome as well. Dell, Inc. (NASDAQ: DELL) is also expressing similar sentiment.

Microsoft Corporation (NASDAQ: MSFT) took many of the chin when it released Windows Vista over two years ago when it received as many panning reviews as possible for the world's largest software company. Since then, the software behemoth has been planning a Vista successor that is leaner, safer, and doesn't require the latest PC to provide optimum performance.

That being said, the rumor is that the new Windows 7 will be available for sale and on new PCs sometime at the beginning of 2010. According to one of Microsoft's chief Windows engineering leads, the world could see Windows 7 sometime this summer.

Hewlett-Packard Corporation (NYSE: HPQ) may be playing with fire when it comes to one of its biggest partners. Microsoft Corp.'s (NASDAQ: MSFT) Windows Vista operating system that ships on virtually every HP consumer and business PC system is so sandbagged and hard to use that HP may be installing its own software to allow consumers to easily do things like view movies, digital pictures, and other seemingly simple tasks that many consumers find cumbersome and precarious even with Microsoft's vaunted "easy to use" Vista operating system.

It's a pretty big statement that the largest PC maker in the world wants to bypass the operating system software from the world's largest software company to make sure consumers can do things without any muss or fuss. HP's customer experience group, headed by Susie Wee, stated rather pointedly that it wants to make using a computer extremely simple. As Phil McKinney with HP's Personal Storage Group (PSG) division puts it, "Our customers are looking for insanely simple technology where they don't have to fight with the technology to get the task done ... for us, it's about innovating on top of Vista."

Yikes -- innovating on top of Vista? That's a rather large slap in the face of a company with enormous market clout in the software field, and a rather sound beating for what is billed as Microsoft's easiest to use operating system ever. HP wants to be less dependent on the release schedule of Microsoft's future versions of Windows, including the current Vista release. It's all about giving the consumer choice, right?

Right now, the uninformed consumer has little choice but to buy a new PC with a copy of Windows Vista already installed. But Apple, Inc. (NASDAQ: AAPL), who markets its MacOS operating system as extremely simple to use and live with, is making inroads into the PC market more than ever, and larger Windows distributors like HP need an alternative to ensure it doesn't lose customers to the resurgent Apple. Giving consumers an alternative to Windows Vista may just be the right recipe at the right time, yes?

Apple, Inc. (NASDAQ: AAPL) has really never been down for the count as a company, although it's been on hiatus a couple of times in its 30 plus year history. Never before has the company seen such product and financial success, though, than in the 2001-current period. Under current CEO and co-founder Steve Jobs, the company is a force in the entertainment business along with ramping up its fortunes in the PC business where it started. We won't even mention the hardware business (iPod, iPhone).

But the one elusive crown that Jobs would probably love to see shift to his company is the operating system used by PC customers. Now that current Macintosh computers can run Microsoft Corp.'s (NASDAQ: MSFT) Windows Vista (or XP) operating system, is Jobs slyly trying to wrestle the operating system of choice crown from his longtime competitor? After all, a Macintosh customer can switch between a full Mac OS (operating system) on his or her PC and Microsoft's Windows with a keyboard press. Use one OS for work-related things and another for -- everything else. Guess which is which? And don't think that's just what Jobs envisions when he's made every single Mac computer being sold capable of running Microsoft's Windows. Perhaps he's trying to win a long war with Microsoft on the basis of Apple's cooler-than-cool hardware rather than software?

Google (NASDAQ:GOOG) has come up with a new plan to make friends with developers. Software engineers who use the Google Apps Engine to build products will get free access to run their application developments in Google data centers. According to The Wall Street Journal :"Google will provide limited data storage, computing and network capacity as part of the App Engine test and eventually make available additional storage and network bandwidth to developers for a fee."

It is another clever move by the big search company. It encourages developers to align themselves with Google products and services and allows the company the chance to make money down the road. It also makes Google seem "progressive" in its relationships with outside software coders, a reputation that rival Microsoft (NASDAQ:MSFT) does not share. Redmond still charges for most developers to use its services although its does provide some code to companies who want to build applications for Windows.

Google is also taking advantage of the fact that it has one of the largest , if not the largest, collections of servers in the world. Not all of the data and storage capacity on these machines is being used all of the time. What Google will eventually charge developers for is running on hardware the company has already paid for. That makes the project a very profitable business and helps the company diversify away from search revenue.

Douglas A. McIntyre is an editor at 247wallst.com.

Microsoft (NASDAQ: MSFT) says it will sell its older OS Windows XP for another two years. The company announced that "the extension is designed only for ultra-inexpensive desktop and laptop PCs too limited to run the Windows Vista system," according to The Wall Street Journal. XP was supposed to go away because it is old.

The explanation sounds bogus. Microsoft's new OS Vista has had reasonable sales, but reviews of the software say that it is full of bugs and does not help PCs work well with other devices like printers. Apple (NASDAQ: AAPL) has been pushing its OS not just for Macs but directly into the PC market. The company claims that its product works better than Vista and it appears that some consumers are buying into that claim.

There have also been reports that some corporations do not want to upgrade to Vista and will keep the old Microsoft OS running until a version after Vista is produced.

The Microsoft move may have a silver lining. Customers and businesses that want the latest and most powerful Microsoft product can buy Vista. Those who are concerned about the software can use XP, instead of considering the Apple alternative.

Douglas A. McIntyre is an editor at 247wallst.com.

Product (RED) is a global effort that is providing significant monetary resources to assist in the reduction of AIDS in Africa in addition to providing treatment to hard-hit countries in that region. The project has attracted sponsorships from many large tech companies, and one of the larger PC companies has now entered the fray.

Dell, Inc. (NASDAQ: DELL) will now be donating $50 to $80 when specific laptop or desktop PCs are sold with Microsoft Windows Vista as the operating system. In fact, the Dell announcement of Product (RED) support was made in concert with Microsoft Corp. (NASDAQ: MSFT). My question is this: with Dell's current position in the PC industry, can it really afford to do this?

First of all, Dell's Product (RED) systems are all from its top-of-the-line XPS category, which gives the PC maker its highest margins. There's the catch -- a customer will need to spend enough on a top-flight PC to be able and goad the PC maker to donate a gas tank amount of money to Project (RED). Not that this was unexpected -- Dell can't afford to take even a $15 hit on its lower-end, razor-margin systems. Still, the PC maker will gain some good marketing mileage from this promotion.

DISCLOSURE: The author holds a long position in MSFT.

With the Consumer Electronics Show (CES) in full swing this morning, yesterday's cream of the crop kickoff event featured a keynote speech from CES long-time keynoter Bill Gates, the founder of Microsoft Corp. (NASDAQ: MSFT). In his final keynote speech at the CES show before he drops his full-time gig with the world's largest software company, Gates introduced a prototype navigation device that stores photos, music and videos while also suggesting options for shopping and dining. Sounds pretty un-revolutionary for Gates' swan song, eh?

Many of Microsoft's CES introductions since 2000 have fallen flat in the real world, which is not surprising. By trying to keep customers entrenched in its proprietary Windows PC operating system, Ol' Softie puts millions of savvy consumers off its products. Now, there are many other companies guilty of this as well, but they're way better marketers -- Apple, Inc. (NASDAQ: AAPL) is the best example.

Microsoft, though, is realizing that Windows on the PC, along with its Office software franchise, can't sustain it forever. Gates told the audience that consumers want to "interact with digital devices in new ways, such as getting directions from their phones and speaking to their cars." This is true, and it's a reason why Microsoft's Sync has become a hit in some new Ford Motor Corp. (NYSE: F) cars. Now that Apple iPhone owners are interacting with data on their portable devices more than ever, Microsoft -- of course -- wants to ensure that functionality lends itself to devices that feature . . . wait for it . . . software from Microsoft as well. This really is not a new fight for the software giant. It's hard, though, to tell what is different with this version of it.

Google (NASDAQ: GOOG) invited the press and analysts yesterday to see just how well it is doing. Most people who attended were left with the impression that growth and innovation at the company are not slowing at all.

On the advertising front, according to Reuters, "Tim Armstrong, president of North American advertising sales, said every one of its top 100 advertising accounts was increasing spending with Google."

Google also said it was getting increased penetration of its Gmail and Apps products, both of them aimed at Microsoft's (NASDAQ: MSFT) desktop Windows franchise.

One interesting observation made by an analyst from Reuters is that Google did not show off many new products. What it did do was demonstrate improvements to current ones.

This may be a change of direction for the big search company, which has hit the market with everything from Google Earth to its own social network Orkut. Google still maintains its own Finance site for investors and an online retail shopping network.

With the ranks of its employees growing by more than 2,000 people a quarter, Google may have decided to pause and improve what it has. That could be a better way to make money than putting out a new product every week.

Douglas A. McIntyre is an editor at 247wallst.com.

Microsoft (NASDAQ: MSFT), finally seeing the writing on the wall after losing in the European courts, decided today to withdraw its appeal [subscription required] of an antitrust ruling by the South Korea Fair Trade Commission, according to a report in the Wall Street Journal today. "It is important to note that Microsoft remains committed to Korea and continues to work closely with the FTC to ensure that Korean consumers benefit from vibrant competition in the IT industry," the company said in a statement. I bet that's how they really feel. I don't think Microsoft truly wants to help the competition, but they are being forced to do so by the antitrust regulators.

In February 2006, South Korea's FTC imposed a fine of 32.5 Korean ($35.4 million) against Microsoft for abuses related to its dominance in certain software, primarily its Windows operating system. Microsoft must provide two versions of Windows in Korea, one stripped of the Windows Media Player and Windows Messenger and the other carrying links to Web pages that allow consumers to download competing versions of such software. Microsoft appealed this decision in March 2006. This appeal was turned down in May 2006 by the FTC and it asked the antitrust regulator to review the fine. Today Microsoft dropped the appeal most likely because it realized it would lose.

As many U.S. citizens sit back for a brief period today to remember those victims of the September 11, 2001 attacks, we'll reflect on many things. The war on terror, the innocent casualties of war, the downturn of the stock market after the attacks and the triumphant return years later and many other things. To give a welcome piece of relief, let's take a quick look at some companies and look at where they've arrived in the last six years in terms of growth.

Let's begin with Microsoft Corp. (NASDAQ: MSFT). In the September 2001 time frame, the world's largest software company was just on the cusp of releasing the Windows XP operating system to OEM computer manufacturers and consumers. In the fiscal year ended in June 2001, Microsoft's annual revenue stood at roughly $25 billion. By contrast, the software giant's revenues annually for the year just ended in June 2007 stood at $51 billion. That's a doubling of the revenue base in six years, which is exponential growth if you consider the 30-year history of the company.

Now, there are others that have accomplished this as well. Consider Yahoo, Inc. (NASDAQ: YHOO), which stood at annual revenue of $717 million in 2001 to over $6 billion last year, despite its much-publicized problems in 2007. And Wal-Mart Stores, Inc. (NYSE: WMT)? How about $191 billion in 2001 to $344 billion in 2006? If one thing is to be learned here, it's that the stock market recovery -- the indexes, individual equities, most everything else -- has come roaring back from the sad and frustrating days at the end of September 2001.

[photo luisvilla]

Will the software of the future come in a retail box or will it instead be delivered as an internet download only? As only Microsoft Corp. (NASDAQ:MSFT) can probably answer, it seems that thus far, the "software in a box" model has worked and worked well. Whether it be on a retailer's shelf or already installed into an HP or Dell computer system, Microsoft's retail products (and OEM for the most part) are pieces of physical media or enterprise-wide "images" that are are installed as a package. Yet, Microsoft allowed full downloads of some recent software for testing before wrapping it up and sending the final version out.

Is that the model for the future insofar as software distribution? Why not? Physical media these days is not all that costly really, but a pure internet distribution medium would free up even more margin. But do customers need an "out of the box" experience? Some will argue yes, but I'll argue that it's not really needed for software. How about more and more popular open-source software and even ad-supported software distribution models?

Yes, this has all been talked about before -- Google Inc.'s (NASDAQ:GOOG) Gmail product is an example of an ad-supported (and free) consumer-level email product that even works as a smaller-enterprise email service (Gmail for your domain). OpenOffice is a free alternative to Microsoft Office that includes all the functionality most consumers (and even businesses) would need without a single bit of cost. Is Microsoft concerned? Probably, and Wharton legal studies and business ethics professor Kevin Werbach says Microsoft is right to be concerned. "Ten years from now, Microsoft must be weaned from ... license revenue. But it's a long process, because they justifiably don't want to cannibalize a revenue stream that remains phenomenally lucrative."

[Disclosure: I own MSFT shares as of 2-13-07]

This post is written as part of AOL Money & Finance's Best & Worst 2006. If there's no one you'd like to see lose a fortune more than Bill Gates, be sure to cast your vote.

After one too many Windows blue screens of death (and isn't just one really one to many), who wouldn't fantasize about Microsoft Corporation (NASDAQ:MSFT) founder and former CEO Bill Gates losing all his money? Uber-nerd Gates has been listed as the wealthiest person on earth for more than a dozen years, with a recent estimated net worth at more than $50 billion. In 1999 Gates' wealth briefly surpassed $100 billion, making him the world's first centibillionaire. His family ranks second only to the family of Wal-Mart founder Sam Walton as the wealthiest family in the world.

On the other hand, since 2000 Gates has donated more than $25 billion to scientific research programs and charitable organizations through the Bill & Melinda Gates Foundation. He has appeared on the cover of Time magazine eight times, and his home in Medina, Washington, is one of the most expensive houses in the world, with an annual property tax estimated at just under $1 million. In 1994 Gates bought at auction a collection of writings by Leonardo da Vinci for more than $30 million. In 2004 he became a director of Berkshire Hathaway Inc. (NYSE:BRK.A), the investment company headed by longtime friend Warren Buffett (who also appears in the signature style category of the Best & Worst 2006).

In May 2006 Gates said in an interview that he wished that he wasn't the richest man in the world, because he disliked the attention it brought. Isn't that a problem more of us wish we had to struggle with?

Will Microsoft Corp. (NASDAQ: MSFT) have a happy holiday season this year? Well, maybe, but it's a long shot if it is looking for the lift from the about-to-be-released Vista operating system. First of all, the system will only become available to OEM manufacturers and computer sellers at the end of November. This is the last possible moment for PC makers to get Vista onto machines, and hopefully, the new systems featuring the Vista operating system would pump up holiday sales. If PC makers have ad plans now for holiday-season PC sales featuring Vista preloads, they better hope Microsoft doesn't slip on this one.

Microsoft will come out with the retail version of Windows Vista in January after several high-profile delays over the years, and that's when end customers will finally be able to buy the vaunted but oft-delayed operating system upgrade. The largest question on the minds of analysts, though, is if demand will materialize for Vista or if customers will opt to stick with Windows XP, which is stable enough now (without Internet Explorer's bugginess) to suffice for most PC-related tasks.

The Vista previews and release candidates I've seen sure are pretty and look fantastic -- with a very new PC, that is. In terms of utility, I'm not that convinced, but I also haven't seen Vista Premium either. That may change my mind, but I'm still not that sure. The bridge from PC task to home entertainment control (music, movies, DVR capability, etc.) has surely not been built by Microsoft very well, although there are accessories that will make this gap less painful for the technically adventurous.

But, about four months from now (perhaps a little longer), we'll all know if Vista is going to be the hit that Microsoft and MSFT investors need, helping the share price to climb out of the year-over-year funk that's lasted for years now. So, are you planning on buying a Vista system? Talk back and let me know.

[Disclosure: I own MSFT shares as of 10-13-06]