You've probably heard that the European Commission (EC) is conducting a preliminary investigation about Google's alleged anticompetitive behavior in Europe. The fact that Microsoft is probably partly behind this is no surprise. I am not really a friend of the EC's antitrust cases and I don't know if this one is justified. The outcome of this investigation is certainly interesting, but the mere fact that complaints about Google reached this level is much more remarkable.
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By now, you probably expect another pro-Microsoft article and attack on Google. I am sorry to disappoint you, but this also an anti-Microsoft post. However, I won't complain about Microsoft as the possible wirepuller as all the-web-and-only-the-web advocates out there do. If Microsoft is really behind this, then it probably is a strategic error because it is only a matter of time before Microsoft's competitors will complain about Bing's rankings.
This brings me to my point. I always wanted to address this topic because I never liked Microsoft becoming a player in the search business. First, it appears to me that Microsoft's top management neglected their core business by focusing on Google as their major competitor while others, most prominently Apple, had an easy play. This is the only explanation I have for the two most severe management mistakes in Microsoft's history:
The Vista debacle was not at all about technical issues of the operating system. Technically, Vista was Microsoft's greatest achievement since Windows NT. Vista is perceived by many as a failure only because the Windows ecosystem wasn't prepared for this major update. There was enough time between Windows XP and Vista for Microsoft's management to prepare business partners. But it appears that they hopelessly underestimated the importance of this task. Since they are all very smart people, it can only be because they were distracted by pondering why on earth they can't beat Google.
The second big management mistake was neglecting Windows Mobile. How can a nobody in the smart phone business, like Apple, make a fool of all the major players in this market? Was it really so difficult to see that you can't just run a slim version of Windows on a mobile phone? Windows Phone 7 Series is certainly a step into the right direction. The only feature I don't like about it is the release date. The correct release date of Windows Phone 7 Series would have been Christmas 2006. Rest assured that if Microsoft had done that then the iPhone wouldn't even exist today. And if all those resources that were bound up in hunting Google were focused on Microsoft's core business - that is in creating and managing software ecosystems - it wouldn't have been a big deal to come out with a really cool smart phone OS long before a couple of Cupertino guys were able to hack together the iPhone OS.
While these two are the most severe recent management mistakes, others may turn out as comparably dangerous in the near future. I am thinking mostly of cloud computing. The next year or two will show if Microsoft can catch up with Amazon & Co. in this area.
Maybe these management mistakes would be forgivable if those resources had been well invested and Microsoft was a serious Google competitor today. But I believe that it is quite unlikely that this will ever happen. And the reason is the same, because Google will never be a serious competitor for Microsoft. This antitrust case shows why. The more Google tries to expand in non-search-related fields the more their new competitors will complain about their search engine rankings. And if Google were ever forced to disclose their ranking algorithm, they would be dead.
The same applies to Microsoft. If they ever reach a significant market share with Bing, then they will be heaped with lawsuits from competitors. Microsoft then has to transform from a software company into a law firm because they’ll need so many lawyers to fight this battle. The only good thing for Microsoft about this situation is that it shows exactly why Google will never be able to compete with Microsoft in the software business. Running a search engine rules out diversification.
I think sooner or later governments will introduce the corresponding laws. I agree with Joe Wilcox that Google is a dangerous monopoly. Being the gateway to information requires extraordinary responsibility. Repeating the "don't be evil mantra" won't calm down the growing number of Google critics. Actually, I think it makes vigilant observers only more suspicious. Usually only those with a guilty conscience reassure their innocence at every possible occasion.
Of course, a significant market share of Microsoft in the search engine market would be even more problematic. Therefore, it would be better for Microsoft to stop burning money with Bing before the laws change and sell that thing to Yahoo! For those of us who work in the Windows ecosystem, we can only hope that Microsoft will turn its focus again onto their strengths, so that Windows will never be in the dangerous situation that Windows Mobile is today.