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MicroHoo: corporate penis envy?

After reading endless pieces about Microsoft’s obsession with search, I am forced to offer the following theory: penis envy (from Wikipedia):

I worked with Freud in Vienna. We broke over the concept of penis envy. He thought it should be limited to women – Woody Allen in Zelig

While not the same kind of penis envy as that typically referred to in psychoanalysis, the phrase “penis envy” or “small penis syndrome” is also sometimes used to describe the envy of a male over another male’s penis. Although this subconscious or conscious envy may solely be based on the idea that a larger penis is universally more satisfying and appealing to a sexual partner, other implications arise from the fact that a large penis has been seen in many cultures as a symbol of high masculinity, dominance and power.

Microsoft was once motivated by its own Big Hairy Audacious Goal: “a computer on every desk and in every home.” They achieved that goal, and ever since, they’ve drifted. Now their only goal seems to be to stay on top of the heap. They need to stop focusing on eating other people’s lunch and start thinking deeply about what kind of goals might stretch the company once again. “Organize all the world’s information” is already taken, but there are a lot of other things that need doing, that Microsoft is uniquely capable of, and that would energize the creativity and passion of Microsoft’s employees. What’s more (as I’ll get to later) there is a much bigger game afoot, and one that Microsoft would be far wiser to focus on.

Meanwhile, Yahoo! has let itself be defined by the same kind of penis envy. Here is a business that has beaten Google in area after area, that is unquestionably the #1 media company on the net, and yet has let itself be defined by the one area in which it is #2 — and where it could be much more profitable and successful by partnering with #1 than by competing with them.

So, my advice to Yahoo!: continue with your plan to outsource search to Google, just like you did before 2002, and plow those increased profits and reduced costs into your own innovation, strengthening the areas where you are #1, exploring new ideas that will make YOUR users insanely happy, and generally focusing on what makes Yahoo! great, rather than on what doesn’t. That is, unless Microsoft makes you so good a deal for your search assets that you just can’t say no. But either way, let yourself be quit of the destructive competition and focus on adding real value for your users.

My advice to Microsoft: outsource your search to Google too!

Of course, I don’t really expect you to do that. As Todd Bishop wrote in a piece called The Rest of the Motto back in 2004:

…people who have been following the company since the early days point out that the stated goal was actually, “A computer on every desk and in every home, running Microsoft software.” In an October 1995 interview with Fortune magazine, for example, Bill Gates said: ” … I still believe in our vision — a computer on every desk and in every home, all running Microsoft software.”

Microsoft has long operated on the model of platform as lever for lock-in and competitive advantage, or as Tolkien put it, “One ring to rule them all.” But as I’ve been saying in my advocacy about Web 2.0 from the beginning, there is another model, represented by both Linux and the Internet, that might be called small pieces loosely joined. (I don’t use the term in quite the same way as in David Weinberger’s eponymous book (linked just previously), but the phrase is just too right to ignore.) The Unix philosophy, laid out so brilliantly in The Unix Programming Environment, is of a network of cooperating tools, each doing one thing well. This philosophy took root on the internet as well, and has proven to be an enormous engine of innovation.

I believe that we’re collectively working on an Internet Operating System, and that it will ultimately look more like Unix than it looks like Windows. That is, it will be an aggregate of best of breed tools produced by an army of independent actors, all playing by the same rules so that those tools work together to produce a whole greater than the sum of the parts.

Fighting over search is a bit like the Free Software Foundation re-implementing cat, ls, sort, and all the other Unix utilities that were already available in the Berkeley distributions of Unix. The real problem was solved by someone outside the FSF, when Linus Torvalds wrote a kernel, a missing piece that became the gravitational center of Linux, the center around which all of the other projects could coalesce, which made them more valuable not by competing with them but by completing them.

Don’t get me wrong: I’m not saying that there isn’t enormous room for competition, and that competition isn’t good for the market. Compete where you have ideas that can really change the game, but don’t play me-too.

So let’s assume that Google has won at search, or close enough to make no difference. Is Microsoft better off trying to reimplement cat and ls, or trying to figure out what’s still missing from the Internet Operating System? While they are locked in penis envy, all the really cute girls are going out with startups :-)

So think hard about the future internet OS: ubiquitous computing, with a computer not just on every desktop and in every home, or even every phone and every camera, but in everyday devices, clothing, shopping carts, cars, pens, toys, buildings, roads, the power grid, even human bodies–and yes, lots of server farms. An infrastructure of real-time data services across that “network of networks,” with search (and search-based-advertising) only one of many such services. As David Stutz once wrote: Useful software written above the level of the single device will command high margins for a long time to come.

This is the real Web 2.0, the web as platform. Search and its advertising economy is only one subsystem of that platform.

I know there are lots of people at Microsoft Research already working on key parts of this vision. Get behind them. Pour resources into the future, not the past. Meanwhile, there will be a lot of client devices in our connected future. And the connected devices that are the most successful will be the ones that are most open, the ones that are best for using ALL the services that are popping up out there, not just the ones that are part of a single vendor stack. The internet operating system is still in its infancy, perhaps at the level of Windows 3.1 (a simple, flawed GUI skin over DOS) or the GNU system without the Linux kernel. Microsoft has an enormous opportunity to build client software and devices that are ideal citizens of the software cooperative that the internet is becoming.

(Aside: Apple’s apparent success with an “own the stack, from the device to cloud” strategy is misleading. With both the iPod and the iPhone, a key element of success is precisely the device’s openness to what Apple does not own. Imagine an iPod where you could only buy music from the Apple music store instead of ripping your own CDs (this is Amazon’s mistake with the Kindle). Imagine an iphone without the Safari browser (opening a world of web apps to the phone) or the Google Maps application. Apple owns key elements of the stack, but it’s a permeable stack, and getting more so.)

Learn from the best, partner with the best, fill in the gaps, and build for the future. Above all, remember that great companies have “big, hairy audacious goals.” Energize Microsoft by pursuing a seemingly impossible goal that can change the world for the better.

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  • waven

    That was brilliant. It was like an adult just walked into the playground and straightened out all the kids in the sandbox fighting over the plastic shovel. I wish I could add more to the discussion, but I’m just so grateful someone finally said all that, and said it in such and organized, articulate, and humorous way. Thanks.

  • Gavin Carothers

    “Don’t get me wrong: I’m not saying that there isn’t enormous room for competition, and that competition isn’t good for the market. Compete where you have ideas that can really change the game, but don’t play me-too.”

    In that case, I do wonder why O’Reilly has it’s own online book store. I understand having your own place to download books, and other forms of new media. But why bother with inventory management, customer service, and the expense of an ecommerce system when Amazon clearly has it all? What does O’Reilly gain from playing me-too?

  • http://tim.oreilly.com Tim O'Reilly

    Good question, Gavin. But the analogy isn’t quite accurate. We do use Amazon — they are in fact our largest channel. Microsoft doesn’t do business with Google. Publishing is a great example of a cooperative, multi-partner ecosystem.

    We do e-commerce on our own site for several reasons:

    1. We sell a lot of products that Amazon doesn’t carry, including conference tickets, Safari subscriptions, O’Reilly School of Technology courses, etc. And because these are direct products — that is, customers come to us directly to learn about and buy them — we need to support that activity. There’s no real reseller market for these products (i.e. one in which we get more exposure and sales by having the product sold by third parties, enough to offset the additional costs imposed by that channel), and there would be no reason to give up the margin to someone like Amazon. (That being said, we’ve often suggested to them that they become a Safari reseller, for instance.)

    2. We have to support other channels besides Amazon. When we started, we were dealing with thousands of bookstores (before Amazon and the chains put most of them out of business), but even apart from that our e-commerce operation has many aspects that couldn’t just be replaced by Amazon. We have printers, a warehousing and distribution partner (Ingram), payment infrastructure partners (credit cards), etc. If Amazon offered 1-click as a service, making the e-commerce activity easier, we’d sure use it.

  • http://epeus.blogspot.com Kevin Marks

    Tim, your comments about the composable nature of the Web platform are spot on – building on open standards and open source to make the web better is what Google is trying to do too. If you come along to Google I/O next week, you can get a feel fro the breadth of this, from HTML5 to Android to KML to OpenSocial to AppEngine. (Yes, I work for Google on Developer Relations, but it is because I believe in the open web that I do).

  • http://maheshcr.com/blog Mahesh CR

    Excellent post. Captures the essence of what might be in the best possible way.

    But honestly, in imagining the future have we constrained the possibilities?

  • http://galactic-patrol.spaces.live.com Bruce

    Its not hard to understand. To maintain growth that our shareholders demand is getting harder and harder in Microsoft’s current markets. We want additional profit opportunities, in areas where we can take advantage of our core competency in software. Thanks, Google, for showing the way.

  • eCurmudgeon

    One minor nit: I strongly suspect that any “Internet Operating System” will look a lot more like Plan 9 rather than Unix. Especially if you consider the evolution of the Internet into a more amorphous “cloud” of computing resources, rather than a formalized network.

  • http://searchengines.wordpress.com/ SearcH◆◇ EngineS WEB

    Possibly, the new energy that Yahoo and MSN has put into both Search and PPCs may have sparked Google to work even harder at relevancy in SERPs and fairness in PPCs.

    Without the threat of Yahoo – there is less of a demand to strive for perfection.

    They have a 65% share and Yahoo has 20% – according to most measurements. An 85% search share would weaken their drive to keep improving since MSN and ASK are simply not that threatening and AOL is currently using Google.

  • http://www.aintnolai.com william lai

    As a technologist, I am 100% in agreement with Tim that Microsoft should focus on the Web as a platform, the Web OS.

    But Microsoft no longer thinks like a technologist; it thinks like a business, a big, rich monopolist to be exact. Its singular competitive goal is to extend its own dominant position in the tech industry, and prevent the next dominant player from taking over its crown. Google is such a company, playing in a business (ads) that has much higher revenue opportunity than Microsoft’s. In this sense, it isn’t penis envy, it’s about exterminating competitive species in an evolving/evolved ecosystem.

    It’s Darwinian evolution. And if it doesn’t win the ads game, Microsoft’s extinction will only be a matter of time.

  • http://www.gofrostfire.com GoFrostfire.com

    The search market is still in its infancy, once we get sematic search, the playground will be altered once again…

  • http://hyokon.com hyokon

    I don’t exactly think so. Historically, MS did best when they were catching up and disrupting an incumbent. It just doesn’t feel that way, because MS is the bigger company.

    It is not that the better one wins. It is that the one who wins is the better one. (Adopted from Bongsu Suh, Korean Go player)

  • http://www.useit.com Jakob Nielsen

    I don’t think that search is a done deal. When we do user testing, we often see people fail at search or get sub-optimal outcomes to their tasks. Remember, it’s not about finding documents, it’s about getting things done.

    So somebody could easily produce a better search engine than the current market leader; once that’s done, the users will follow. Not the next day, but over a year or two.

    (When I say “easily”, I don’t mean that it’s an easy job, but that it’s easy to envision and could easily happen. It’s happened twice already, after all, in only 15 years of Web history.)

    Giving one company a monopoly on search is a threat to democracy and human rights. For all practical purposes, the first SERP page *is* the Internet. Those who decide what should *rank* high also decide what Web users should *read*, and thus in the long term what they should *think* and vote.

    If there are multiple competing rankings, then this is not so bad. But if there’s only one ranking, then any bias built into that one system will have a very unhealthy effect on the world.

    Saying that there should be only one search engine in the world is like saying that there should be only one newspaper or only oner TV network, except worse, because the Web is likely to have a greater impact on people’s thinking since it’s an interactive and growing medium, and since it’s used for so many more things. (Including education and training, so saying that there should be only one search engine is like saying that there should be only one book publisher, with one editor who decides on all textbooks and continuing education books, from kindergarten to med school.)

  • http://www.ydrive.com YDRIVE

    Agree, regarding the Yahoo part. Disagree, regarding the Microsoft part.

  • aaron wall

    “And the connected devices that are the most successful will be the ones that are most open, the ones that are best for using ALL the services that are popping up out there, not just the ones that are part of a single vendor stack.”

    And what could be more successful than the opening gateway to any type of information on all the devices? From a competitive standpoint, what can Microsoft do online that Google can’t replicate with fatter margins while giving themselves free or cheap ad distribution across the entire web to win marketshare?

    Google search is not open (they replaced a good search API with a useless one, do not tell advertisers what clicks will cost ahead of time, does not tell publishers what % of ad revenues they will get, etc etc etc), but Google is perceived as being open.

    If you think openness is the key to success then you should be stating that they should challenge Google head on for not being open.

  • bcarpent1228

    I like the description of:
    Linux: a network of cooperating tools, each doing one thing well.
    Microsoft: All running Microsoft products

    — and the attempts by all to develop “”useful software written ABOVE the level of a single device””

    (I find) Linux gives me too many choices – Microsoft too few and am encouraged by philosophies which attempt to resolve the all-or-nothing dilemma.

  • Dave Small

    Microsoft should stop trying to take over someone else’s business and look to the future (hint: think mobile web).

    The Internet has been the engine that’s driven technology for the past decade. The most important thing about the Internet is that the phone companies didn’t get control of it in the beginning. The early dial-up ISP’s were able to establish an economic model where the user pays an affordable flat monthly charge for unlimited usage.

    Had the phone companies gotten control there would have been a toll both at every jurisdiction plus a kilobyte charge and much higher monthly subscription charges. The Internet would still exist but it would be no where near as ubiquitous as it is now.

    The phone companies do have control of the cell phone networks. Those toll booths are firmly in place.

    In order for the mobile web to evolve the phone company pricing models have to be broken. Google understands this and is trying to do something about it. Microsoft should be working with Google hand in hand to make this happen.

  • http://tim.oreilly.com Tim O'Reilly

    Aaron — good point. I made this clear in my followup post:

    http://radar.oreilly.com/archives/2008/05/why-search-competition-isnt-the-point.html

    Jacob, I may or may not have addressed your objection as well. I also don’t think search is a done deal — far from it. But I also don’t think that Google owns search even now. When I want to look for a photo on something, I’m as likely to search flickr as I am to search google images. When I’m looking for a product, I’m likely to go right to Amazon.

    Not to mention the fact that the aggregate of all search on all independent websites is probably greater than the market share of Yahoo! and Microsoft combined. Microsoft’s purchase of FAST is a smarter move on search competition than buying Yahoo!

    Jacob – re your argument re the top Google hits being “the internet” for many people. You’re right. But Microsoft buying Yahoo! won’t change that. In fact, I’d bet that Google’s search share goes up very quickly if Microsoft succeeds in buying Yahoo!

    Meanwhile, the role of search as currently constituted, people sitting at a keyboard typing at a web browser, is going to go down rapidly. What will the search paradigm be for mobile? There’s a story that is just beginning to unfold.

    My main point is not that Microsoft shouldn’t compete; it’s that they are competing badly, because they don’t understand what the real game is.

    Finally, to your point about saying there should be only one search engine being like saying there should be only one publisher is just wrong. It’s like saying that there should be only one bookstore. And yes, we’re headed there too :-(

    FWIW, do one of your vaunted usability analyses on how people discover web sites. How much of your web discovery comes through Google? I know I read far more web sites via links — lately, most of my reading is triggered by twitter. But I also get lots of leads from blogs I follow, from people sending me links in email, and from deli.cio.us. When I’m looking for something specific, if it’s not on the first page of google results, I keep looking.

    You’re assuming that Google is the portal through which people find all web content, and I’d argue that it’s the gateway only to a small subset of online content consumption.

  • http://tim.oreilly.com Tim O'Reilly

    David Small wrote:

    “In order for the mobile web to evolve the phone company pricing models have to be broken. Google understands this and is trying to do something about it. Microsoft should be working with Google hand in hand to make this happen.”

    Amen to that.

  • http://www.socialstartups.com David Lifson

    I think the key point here is to not play the same game. Yahoo and Microsoft won’t beat Google at being Google. They’ve got to take on search in a completely different way, with a different value proposition, and probably a different UI. I still don’t use Google for shopping – I use Amazon, Newegg, Etsy. I don’t use Google to search for airfare – I use Farecast.

    So I agree – don’t try to be a better Google, try to be another (different) Google.

  • http://adecon101.blogspot.com/ DJ Chang

    Buried in the obsessive conversations and advice for MicroHoo is a gem. The Internet is a platform for collective innovations. Many killer apps will emerge. Let’s not just focus on search.

    Search, Internet, and Innovation

  • http://www.jacobmathai.com Jacob Mathai

    Well written. Cheers!!

  • Jonathan Marks

    Agree entirely. There is still so much to be done in search development, especially in the audio/visual sectors that I work in. And search on the mobile in this part of Europe is truly awful. I wonder if the BBC will ever outsource to Google? The Beeb has a world-class site, but truly awful search.

  • http://pubfrontier.com Joseph Esposito

    A brilliant post. It’s too bad for Microsoft that O’Reilly doesn’t work there. (The Wikipedia article cited in the post is, unfortunately, not very accurate.)

    Joe Esposito

  • http://webandlife.blogspot.com Andy Wong

    Who was behind the idea of Microsoft’s the Search That Pays You Back (cashback)? I don’t know. I just know the one who approved it was the CEO, who had lost basic vision of running a giant company. Cashback scheme is generally used by some small company to improve traffic in short term, and such scheme is not so good for company’s public profile, as the company will be looking cheap for this, and mature customers won’t be coming for such cheap things.

    Microsoft lost vision because goal of “”a computer on every desk and in every home” was archived. Staying on top of the heap is not really a goal, or at most, just a money goal. Microsoft has tons of historical burdens, and could hardly shift focus to new goal without considering whether new goal could harm legacy burdens such as Windows and Office. For example, on-line Office may harm desktop Office regarding to revenue.

    One important thing that differentiates Google and other search engine is:
    Google focuses on, owns and keep producing commodities of infrastructure: machine farms with relatively cheap power supply, and many to-be-used underground cables. It is currently quite hard to imaging any new startup, Yahoo, Microsoft, or IBM could possibly catch up with the building of those commodities needed for search. Unless, one day, the Congress might have some kind of regulation to force Google to open its infrastructures entirely to other companies rather than to open the infrastructures though high level API, as it is kind of wasting the Earth’s resource to replicate machine farms and underground cables for every companies which want to win over Google’s search services.

  • Fake Jeff Bezos

    “We have printers, a warehousing and distribution partner (Ingram), payment infrastructure partners (credit cards), etc. If Amazon offered 1-click as a service, making the e-commerce activity easier, we’d sure use it.”

    Tim, actually Amazon does all that too as a service. We offer a personalized Amazon Store, the Fulfillment API, Payment Services and Print on Demand. Only what is lacking is OpenID support, but that is coming.

    Oh, and we also have the Internet Operating System, on demand.

    We are going to take over the world. Mark my words.

  • http://ap0calypse.agitatio.org ap0calypse

    It has to be “Linus Torvalds”, not “Linux Torvalds” :)

  • http://www.wyman.us/ Bob Wyman

    What Microsoft seeks is “Autarky.” i.e. “an ecosystem not affected by influences from the outside, which relies entirely on its own resources. In the economic meaning, it is also referred to as a closed economy.”
    It doesn’t work for countries. It won’t work for Microsoft. See:
    http://en.wikipedia.org/wiki/Autarky
    Rational economic actors maximize what they do best and, for what they do less than best, they rely on others.

    bob wyman

  • http://www.itresponsibility.org Sebastian

    Dear Tim,

    I like your points very much. Regarding the proposed situation I truly believe that Microsoft’ “audacious goal” must be to propose an alternative paradigm/vision. In my point of view it has to be more like a philosophical competition, more like: What kind of internet paradigm do you want?.

    Google attacks MS-Yahoo merger based on MS “history” defending intellectual property rights and proprietary environments, but I believe that the current paradigm (open environment with no content restrictions) proposed by many key players in the industry, only benefits Google’s investors and shareholders, depriving internet’ development.

    Let me explain further… Analyzing history we can find out that the most economically advanced societies have found in respect for individual property, an engine for the creation of wealth and social development. I believe that this respect for individual property has been undermined in recent years by a new generation of e-businesses that has abused the lack of control over property rights generating a distorted economy.

    Two visions given – freedom of contents and economic spill- have contributed to this current paradigm, where property rights of individuals and companies were undermined invoking freedom and free access to information, in an environment devoid of commercial pressures that no longer exist.

    I believe that this vision of freedom was rooted in the age of innocence when the Internet was designed as a medium for promoting scientific and academic interest. This vision of free and unlimited access remains today judging any attempt to change this idea as a violation of freedom of development.

    The second vision of this paradigm has a direct relation with the economic spill fallacy. On its quest to impose this unique vision, the paradigm has created its own measurement systems and the generation of economic results to support this vision of freedom.

    Regarding the measurement systems, the model proposes Content producers to offer their assets for free to the general public. If these contents are cited by other digital proposals they will go up in the traffic ranking managed by Content provider companies. (e.g.: pagerank)

    The economic model that supports the system is based on a simple logic. If many consumers enter a site, the likelihood that the advertisements are consumed is presumed high and consequently content producers may receive significant benefits in terms of results.

    Therefore, the model proposes a method where content producers must offer for free their productive efforts and content providers – Mainly Internet technology frameworks – will monetize them sharing the benefits.

    As a result, only few Content producer companies develop digital media operations with the same intensity as they have done using other channels. In my opinion, the lack of clear rules and an inability to operate in the online realm in the same way as they do in the offline arena has led many of them to avoid a trade policy advocacy for the channel.

    The current paradigm is not only affecting Content producers. In its new version the paradigm states that if an Internet access provider wants to charge more for connectivity services based on the amount of Data packets that they transmit to a high demanding Web site, they will be preying on the citizens’ freedom to navigate on the Internet. (Net Neutrality)

    It is incredible to find out that this theory is proclaimed by the same content provider companies that assign unlimited resources developing programming techniques with the idea to transfer bandwidth consumptions to the client’s side. The theory of the spill does not apply to share the benefits generated by their success with the other participants in the distribution chain.

    Why is important to have an alternative paradigm? Because as we can observe, the current paradigm proposed by a few dominant players in the online arena makes use and abuse of their ideology to explain reality and justify their own existence, beating anyone who opposes them in their perpetual search for greater profits and total control of the online environment.

    The advocates of this view say that the current system allows a free and unrestricted access of people to content, creating equal opportunities for development all over the world. In relation to this vision, I can raise several questions that derive from this reality:

    - Where has the economic model that provides equal opportunities on the Internet gone when the only things that can be seen are a few dominant players that handle financially and ideologically a global system of information and commerce?

    - What happened to the benefits of the proposed system when the only result to be seen is the unmovable presence of few companies that monopolize any attempt of growth by other actors, through the allocation of funds destined to weather the lawsuits based on the infringements these players know beforehand they are going to commit?

    - Where are the virtues of this system when it is common to observe Content provider companies infringing patent rights granted to small players in order to legally choke them on a court during a period of two or three years?

    - What are the virtues of this model when it is common to note regular people who devote their free time to create content with the sole hope that the spill will touch them, while content provider’s platforms become billionaire companies through their creations, sharing no economic benefits with them?

    The current model cannot defend against simple questions. The situation described is observed in all areas of the online business, proving the ineffectiveness of the current economic paradigm. Any global economy analyzed where the whole scene were dominated only by a few number of players controlling all factors would be considered completely inefficient.

    As a result, in my opinion the explosion of technology has not shown a correlation of similar economic and social impact from the side of content creators. Traditional Content Producers Companies cannot find a framework that enables them to conduct their operations with legal certainty and prevision. Individual Content Producers (or programmers too) have not found in the current system a commercial environment that enables them to begin a career as a sole proprietor in the same way that individuals operating in e-commerce (e.g.: Ebay) have done during the last decade.

    Under the prevailing view, contents are not considered tradable goods while products are. In this situation resides the success of e-commerce companies to positively impact the societies where they operate and the failure to achieve the same economic results by the content generation community. The world’s online content commercial development has been undermined by this paradigm that benefits only a few, making us believe that everyone will be reached.

    That is the reason why I believe Microsoft’ “audacious goal” must be to work on an alternative paradigm/vision. The establishment of clear rules (promoting the respect of property rights) will allow a commercial expansion including innovative forms of interaction among participants in the online world…

    And Microsoft (despite that probably some people don’t want to hear that) is the only company that can begin this process, based on their “history” and based on their strengths and products. Thank you for your time…

  • http://www.thenetworkgarden.com Mark Sigal

    Tim,

    First off, great post. Crisp articulation so nuff said there.

    Personally, I think that the larger problem for Microsoft is two fold. One is that the whole DNA of the company has always been about “embrace, extend, extinguish” so it seems outside of Microsoft’s DNA to think different when it comes to partnering/outsourcing.

    The second issue is more fundamental. Their R&D engine is broken. Love or hate Microsoft, in the past it was inevitable that Microsoft would embrace, extend, extinguish because they were resilient at iterating, iterating, iterating to the vaunted 3.0 to the point that in tandem with good enough, integrated, ubiquitous and supported by tools and OS, the market toggled over time.

    When they ultimately crushed Netscape, for example, it was because IE was actually a better browser with even better Java support than Netscape with its tight ties to Sun. They kept innovating while Netscape stagnated.

    My only point is that so much of what we think of Microsoft is in historical terms; namely, this lethal killer with relentless focus until victory is assured.

    Today’s Microsoft is akin to the fading sports star who can just can’t bring it on a daily basis anymore.

    I wrote a post contrasting Apple with Microsoft which looks at how Apple now has the Halo Effect on its side. It’s called:

    Holy Sh-t! Apple’s Halo Effect
    http://thenetworkgarden.com/weblog/2008/04/holy-shit-apple.html

    Check it out if interested.

    Mark

  • Sebastian

    An excelent example of the current paradigm. Viacom “Threatens” Freedom, Says Google (LINK: http://biz.yahoo.com/ap/080526/youtube_lawsuit.html )

  • Craig

    It is interesting to note that Microsoft has just announced it will take on Google’s online advertising by itself after Yahoo pulled out of the merger (for now). They plan to use display advertising to hurt Google’s adwords. I read an interesting article on this at http://searchstrategy.com.au/?p=22 and the SEO guy that wrote it seems to think that Microsoft and Yahoo will be together pretty soon.
    It will be interesting to see how it all develops.

  • http://homepadge.se/panchamkauns RK

    Nice euphemism there, ”rip your own CDs” :P

  • http://www.ardentway.com David 0.

    “But I also don’t think that Google owns search even now. When I want to look for a photo on something, I’m as likely to search flickr as I am to search google images. When I’m looking for a product, I’m likely to go right to Amazon.”

    Exactly, so if Microsoft wants to compete with Goolge in the U.S. search market, they would have to consider buying Amazon, Ebay, Facebook, Flickr, IMDB, and Wikipedia. Experienced internet users use these sites to search because they have specialized and better organized databases. Google stock fell on it’s U.S. comScore data. This suggest that the typical U.S. market search engines are losing searches to specialize sites; despite the fact that these sites don’t focus primarily on search, it’s just a byproduct of their service. Yahoo search is primarily a U.S search market play that’s not worth playing for Microsoft. So I have to agree with Tim O’reilly assessment of Microsoft.

    ” about the future internet OS”

    I don’t envision computers in everyday items, not any time soon. Too many people are just not computer savvy. Too many companies are slow to embrace innovative and daring technologies. When I first saw myspace I thought it was a joke because it was circumscription of a website. But it wasn’t a joke, it was just a simplification and encapsulation of home pages on the internet. Myspace is simple and in many cases unbearably ugly but it’s highly effective. Myspace basically made the internet easy for less tech savvy people to use. If you can’t build your own blog and website you can goto myspace. Same thing with Youtube. If you can’t effectively present and host your videos online then you can upload it to Youtube. This tells me people need simple tech things in America. It’s hard for the most people to make use of innovative technology, it’s a slow process.
    In other words there are millions of people waiting for “RSS for Dummies”

    The interesting thing, Tim, your vision of future technologies could help companies, not just companies but industries. For example computers in everyday items can help protect and promote trademarks and copyrights. Most Bootleggers can replicate cds and clothes but they don’t have the resources to replicate microcomputers and similar tech.

  • Jose Espinal

    Excellent comparision. I really think that a company relying on being in the heap and not being “fed by ideas” is not a company that has their employees motivated enough to bring up the best of what they currently have and what they can achieve.

    Thanks for the article.

  • Brad

    I pretty much agree with this assessment, although I don’t htink that it’s time to totally give up search, because I’m not sure google is really open to making a search product that could be part of the “internet operating system”.
    In any case, I find this article interesting in retrospect since I think what you suggest is exactly what Microsoft is doing with it’s Live Mesh product. It remains to be seen if it’s successful and takes off as a platform, but the vision is to provide a common stack to build accross a multitude of connected devices (of course working in hand with stuff like the .net clr and silverlight to provide a base infrastructure). Thoughts?