Are Microsoft and Google Fighting the Last War?By Lawrence Walsh | Posted 2008-02-20 Print
The battle to control the future's desktop may not begin and end with Google and Microsoft. Pay attention to what's going on in China.
A political battle is raging in the angular corridors of
the Pentagon over the future of the
The trap many military planners fall into is preparing to fight the last
war. History is replete with examples of elaborate and expensive weapons systems
that proved useless when put into battle because they were designed for a fights
of the past. The argument for the F-35 is that it’s designed for insurgency wars
such as those in
Which view is correct? Unfortunately, only history will tell.
The same question of which direction to follow is applicable to the
battle for Yahoo. Microsoft desperately wants Web portal to stave off the
seemingly unstoppable machine that is Google. A litany of others have joined or
a considering engaging in the fight for Yahoo to stake their claim to the $80
billion online advertising market. The names are all very familiar: TimeWarner,
But is everyone aiming at the right target? Is Microsoft—which is
launching a proxy fight for Yahoo—building a machine for tomorrow’s market or
still trying to fight the last war against Google? What all of these companies
may find in their rearview mirrors is what the Pentagon brass fears: the rising
Neither one is in a position to join the fight for control of Yahoo, but
both have the potential of being disruptive to the global online advertising
market. Consider this: Alibaba went public last fall raising nearly $1.5
billion, that’s nearly the same amount Google raised. Alibaba also owns Yahoo
Baidu and Alibaba have managed to keep Google, Yahoo and other American
companies at bay in the massive and growing Chinese market. Alibaba’s Ma boasted
that former eBay
Both companies may dominate
When you consider the potential of Alibaba’s and Baidu’s home market and the Chinese government’s willingness to protect their IT industry, it becomes clear that these future Internet powerhouses have the potential of undercutting the established American players. It’s happened countless times before. Just 10 years ago, Yahoo rejected Sergey Brin and Larry Page’s business plan which lead to the formation of Google.
As Microsoft looks for weapons to battle Google and other Internet players seek entry points into the online advertising game, they should all take a look east—far east—for the competitors that may be in their futures. Failure to take these Chinese upstarts seriously could lead them to fight—and lose—the last war.
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