Branching Out: How Microsoft and Google Will Fare Entering New, and Sometimes Identical, Markets

Both Microsoft and Google are known for an unquenchable thirst to expand into different markets after dominating previous ones. Microsoft is the prevailing giant of software with Windows being the most widely used operating system in the world and the Microsoft Office Suite setting itself apart as the standard for both PCs and Macs. Google is the world's most used search engine with a 49.2% share of searches according to data from July 2006 (Nielsen). Neither companies, of course, are satisfied with their successes, and recently the media has painted a picture of the two titans eying similar prizes. Microsoft is attempting to cut into Google's search by spending millions of MSN Search, and recently Google purchased writely.com, a free web-based word processor, which some say is an attempt to upstage Microsoft Office. As both these companies prove, markets for software and the internet are not easily communal, and victory will eventually be declared.

Evaluating the strategies of these two companies, however, hints at Microsoft's failure of upstaging Google and shows how Google is not attempting to dethrone Microsoft. Google has the correct view of the conflict and ultimately the upper-hand, largely because of its focus on innovation instead of marketing, its constant tinkering to better its services, and its goal of embracing and often creating revolutionary ideas rather than a reactionary copying of already-successful ones. This is an uphill battle for Microsoft, and a look at the company's strategy reveals why.