Google vs.

Microsoft
 STRATEGIC MARKETING

By-
Ashish Chadha Bibhu Prasad Pati
Reema Kwatra Deepansh Agarwal
Kapil Kapoor Shashank Singh
• Microsoft Corporation is a multinational
computer technology corporation that
develops, manufactures, licenses, and
supports a wide range of software products
for computing devices
• Headquartered in Redmond, Washington, its
most profitable products are the Microsoft
Windows operating system and the
Microsoft Office suite of productivity
software
 Microsoft Sources of
Revenue
Source 2009 2008 2007 % Change % Change
2009 vs 2008 2009 vs 2008

Server 14126 13102 11104 7.82% 17.99%

& Tools

Client 14712 16865 14911 -12.77% 13.10%

• Google Inc. is a public corporation, earning
revenue from advertising related to its Internet
search, e-mail, online mapping, office productivity,
social networking, and video sharing services
• The Google headquarters, the Googleplex, is
located in Mountain View, California
• The company is running thousands of servers
worldwide, which process millions of search
requests each day and about 1 petabyte of user-
generated data every hour
 Some Questions
• Should we compete?
• What are we good at?
• How do we compete?
 Why Compete?
• The competition is about creating
universes or ecosystems that both
companies hope consumers will want to
live their technology lives inside
• A fight to be recognized as the world’s
most important technology company
 Microsoft’s Goal
• Microsoft would love to see everyone in the
world using its Internet Explorer browser to
search through Bing to find a story from its
MSN portal and to email via Hotmail or
Outlook to a friend
• Add in a smart phone running Windows
Mobile and an Xbox in the living room for the
kids, and you have a Microsoft family
 Google’s Goal
• Google ecosystem looks different
• It starts with a Google Chrome browser with a default
homepage set to Google News or a customized Google
homepage
• From there you might go to Gmail and then click on a
Word document sent to you as an attachment which
Google will quickly and safely open for you in its online
word processor
• Google's main goal is to compete to encourage migration
from desktop to the Internet, from software to web
applications (SAAS)
 Google’s Corporate
Strategy
• Google wants you to search and travel
around the web, hitting web pages that
run Google-served ads and Google
tracking cookies
• Its aim is persistent and silent data
collection to profile you in order to
deliver you to advertisers for a
premium
 Key Areas of Strategy

• BROWSERS
• ONLINE SEARCH
• OPERATING SYSTEMS
• ADVERTISING
• MOBILE SERVICES
 Browser
• Internet Explorer in all its variations still
retains close to 70 percent of the
market
Browser Market Share
Top Browser Share Trend
 Online Search
• Google delivered 78.5 percent of search
results pages delivered to U.S. web
users.
• Microsoft recently debuted Bing, a new
search engine it hoped would fare well in
comparison to Google
• Even after a $100 million campaign the
share increased dismally
Search Engine Market Share
Top Search Engine Share
Trend
 Advertising
• Google earns 99% of its revenue from advertising
• Microsoft has not made money on the internet
• To turbo charge its ad delivery technology, it paid
more than $6 billion in cash in 2007 for aQuantive, a
full-service online advertising concern
• Microsoft’s online ad business lost $1.2 billion in
2008, double what it lost in 2007
 Ad Server Market Share
(Attributor Corporation, 2008)
 OS
• Microsoft has millions of users who know
nothing else and who like Windows
• There are millions who are attached to games
or the thousands of desktop apps that are
only available on Windows
• Thousands of devices just plug in and work
on its hardware
• Familiarity with Microsoft software is a
requirement for a huge number of office jobs
 OS
• Google announced, but did not show off, a new OS
to compete with Windows, dubbing it Chrome OS
• Google’s OS will be for the web and browser-
based. It hopes to convince developers to write
software that runs inside a browser, instead of on
top of the OS as developers for Windows and
Apples’s OS X do
• Idea is to have their hand on every bit of
information that people write
.
 Share in OS Market
Operating System %age Market Share

Windows 92.77
Mac 5.12
Linux 0.95
iPhone 0.35
Java ME 0.3
Symbian 0.15
Others 0.36
Market Share
 Mobile Services
• Traditionally locked value chain model

• This model stops Google to access mobile

content
 In order to duplicate its open
model, Google designed a three
fold strategy :

Telecom
partnership
 Google key success factors : Web
specific ?

• Scalability
• Data mining
• Network effects
• Openness
• Business model
• Correlation
 Scalability

Ability to easily grow at marginal costs

•Applied to infrastructures : ability to adapt its size to high

load & volumes

•Applied to business models : ability to monetize millions

of users
 Network effects

• The utility of a good or a service varies with

the number of users

• The reach of a critical mass of users

constitutes a significant barrier to the entry
 Data Mining

• The web offers the opportunity to exploit

and analyze a very large amount of data

• Users’ behavior can be analyzed to create

monetizing value
 Openness

• The traditional walled garden media

strategy becomes irrelevant

• Content and services must be open and

interoperable to favor audience circulation
 Correlation

• Non-traditional actors become part of the

value chain

• Users, content creators and external

developers are given the tools to create
new markets and enrich services
 Business model

• Advertising is not a market but a

business model

• Any market that attract advertising is a

target for Google
 Why won’t Google be affected by the
crisis ?
• 4 levers will allow Google to increase its
revenues amidst the economic crisis
Google eating the market
share
•Free alternative to
Microsoft Office
pack

Launching of the Office

Google software pack: a word-
processor, a spreadsheet
program, a presentation tool
and a calendar

Acquisition of Sketch Up, a

3D modeling software with a
free version made available
How Google buys traffic?
 Media strategy of Google

• YouTube acquisition is part of a strategy

to monitor key content and audience hubs.
 Recommendations : Where
is Microsoft lacking

The global value of the company

relies on independent lines of The global value of the company relies
on traffic between network parts
products/business units
(proprietary or partners)
 Recommendations for
Microsoft
• Acquire the major players in SaaS market
• Stripped down version of Microsoft Office for free use
(to save existing customers) and hassle free
integration with offline Office
• Innovate Bing
• Developing ERP market using SaaS model
• INNOVATE!
 Recommendations for
Microsoft
• Should raise IPR and public Information
security issues to dilute the brand Google
• Political lobbying with government by raising
the security issues
 Recommendations for
Google
• In developed countries, Google must secure and invest in high-speed
connection services

• In developed nations or in emerging countries--- connect everyone

• Google now should make co-investments or partnerships rather than

directly acquiring these new technologies

• Promote innovative open source applications to increase Web traffic.

THANK YOU