Microsoft and Google face off over innovation

Microsoft and Google on Thursday took direct aim at each other's core businesses as they showed off ambitious new services that represent some of their biggest internet development efforts.

While the services – a new search engine from Microsoft and a bid to replace traditional e-mail and instant messaging by Google – generally attracted positive reviews from technologists and analysts, several questioned whether they would do much to change the balance of power in the showdown between the world's biggest software and internet companies.

Microsoft's new search service marked the latest effort in a years-long struggle to stay relevant in a market where it is a distant number three behind Google and Yahoo. In an apparent bid to enter the popular lexicon alongside Google, the software company also said its search service, which would be relaunched on June 3rd, would be renamed Bing.

Steve Ballmer, Microsoft's chief executive, said at an industry conference that he was under no illusion that the enhancements would rapidly give Microsoft a much bigger market share after the service, despite a marketing budget that he said made him "gulp". "My time frame is lots of years," Mr Ballmer said. "There's no way to change the game in one step."

With Bing, Microsoft has finally matched Google and Yahoo with the basic relevance of its search results, analysts said. However, some questioned whether it met Microsoft's claim of having fundamentally changed the experience of search, particularly since rivals have been pushing ahead with innovations of their own.

"They may have caught up with their competitors, but it's not clear they have by-passed them in any significant way," said Allen Weiner, an analyst at Gartner. "It still represents the Web 1.0 approach to search, which basically gives links" to other websites in return to queries, he added.

Meanwhile, Google claimed to be on the verge of reinventing e-mail with a forthcoming service called Google Wave, which it said would be launched later this year. The service, which includes a range of tools for communicating and collaborating over the internet, is "what e-mail would look like if it was invented today," said Lars Rasmussen, the Google developer behind the project and creator of the popular Google Maps service.

While the service drew plaudits from web developers, some warned that its eventual success would depend on Google's ability to get other companies to turn it into a technology that becomes as ubiquitous as e-mail.

"The Wave team has done a great job, but for Wave to really succeed, it needs to become a new fundamental service on the net," said Tim O'Reilly, an internet entrepreneur who has become one of the strongest advocates of open technologies like this.

Others warned that it may prove easier for Microsoft to win over new users for its search service than for Google to win over users for its new communication service. "The switching costs in search are zero, but the switching costs in mail and messaging are pretty significant," said Mr Weiner.

Microsoft and Google each claimed to have come up with innovations that would change the way internet users experience search and email, respectively.

Published by: Richard Waters

Published 28th May, 2009

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