Google, Microsoft serious on software, services, law

The rivalry between Microsoft and Google is getting fired up over software and services and has become so hot that it is spilling into the legal and regulatory realm, according to some observers.

The latest shot is coming from Google, which according to a Wall Street Journal article is making antitrust claims concerning Vista and desktop search software.

Google's complaint comes on the heels of Microsoft's call for federal regulators to investigate Google's recent acquisition of online advertising firm DoubleClick.

The tit-for-tat is starting to reveal that competition is getting white hot, but it might not be in the area everyone is looking at, according to some observers.

"Google's CEO [Eric] Schmidt is on record saying Google would focus on search, ads and apps and I think apps is the Achilles' Heel part of it," says Guy Creese, an analyst with the Burton Group. "It is clear Google wants to do more than just search, they want to get into the enterprise space and I think that will be the Waterloo."

Others say this competition is getting so intense that all the gloves are off.

"The competition has spilled over to the legal and regulatory process," says Greg Sterling, founding principal of Sterling Market Intelligence, a consulting and research firm.

"They are serious rivals and they are taking every opportunity to secure some advantage and to point out where there is some unfair advantage. That is probably what Google is doing here and what Microsoft is doing with DoubleClick. They are sort of mirrors of one another. "If this model of complaining back and forth through the regulatory bodies comes routine, it will certainly add a different flavor to all this stuff."

The Burton Group's Creese says the glory days of media hype are gone for Google.

"Google realizes it has to work hard at this so they are enlisting lawyers and everyone else. Google is starting to realize that Microsoft is not as dumb as it thought."

He says Google's realization has come in the battle over online services, where Google has put together, among other services, a collection of collaboration tools called Google Apps for Your Domain, which it unveiled late last year.

Last month, the company added a set of APIs called Google Gears, which allows users to take their work offline.

"Google Gears is an admission that Microsoft is right about its strategy of software plus services," says Creese.

Microsoft's software plus services strategy aims to marry online services with desktop and intranet applications in part because users are not always online.

"It's an admission you can't always be connected to the Internet and Google is saying 'we better figure that out,' " says Creese.

He thinks that Google is starting to mimic Netscape, which ran into the Microsoft buzz saw when it got into the browser-based collaborative application space. The company's browser eventually ended up as the centerpiece in the Department of Justice's anti-trust case against Microsoft.

"Media darling, lots of market cap, have their own way to look at the world that is new and different, Google and Netscape fall into that [description]," Creese says.

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