Google Search To Surpass Size of Microsoft Windows in 2009 - Silicon Alley Insider - 0 views
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Google's search business will pass Microsoft's Windows business by early next year (at the latest). Good thing Microsoft has another huge, wildly profitable monopoly: Office. Add that to the calculation, and Microsoft can breathe easy for a few more years: GOOGLE SEARCH vs MICROSOFT WINDOWS + OFFICEQuarterly Revenue Q3 2006-Q1 2008 Of course, Google's visible in that Microsoft rearview mirror, too--especially now that it offers a product that is directly competitive with Office. And then there's the most depressing comparison (from Microsoft's perspective). After 13 years of heavy investment, frequent doubling down, and--until recently--a browser monopoly, here's how Microsoft's online business is doing relative to Google's search business. Remember: Google was founded four years after Microsoft launched its online business, and Microsoft's search business is just a tiny piece of Microsoft Online.
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The "Windows monopoly+Office monopoly=Microsoft" story was absolutely true 10 years ago, but less so now. 1. It looks as if the "Office" revenue figures are coming from MSFT's reported revenues in the Business segment. That's not all Office. Based on what they've said at the last few Financial Analyst Meetings, Exchange is approaching $2B/year, SharePoint is about $1B/year, and Dynamics (formerly Microsoft Business Solutions) is more than $1B per year. I also know that Project has been a $1B/year business for a long time (believe it or not), and products such as Comms Server and Visio contribute around $500m/year. Margins on all these products are lower than on Office, but most (not Comms Server) are profitable. 2. In addition to all the non-Office products that compose its Business segment as mentioned above, the Server and Tools business (Windows Server, SQL Server) is profitable (30% margins) and growing revenues average of 15% for the last six years. Not monopoly, but a good business. Look at all these stats together, and seems like they should get out of search and advertising and sell off (or scale back to maintenance mode) most of the consumer online sites, focusing instead on hosted business apps--they're already doing it with Exchange and SharePoint, why not Office? If somebody's going to canniblize their "real" business, it might as well be them.
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The Henry Blodgett article comparing Google and Microsoft. Excellent source! -
Blodgett calls Windows a "natural monopoly," a term derived from the science of economics. But the view of Windows as a natural monopoly blinks past more than a few facts: [i] the monopoly at all times was firmly rooted in government-granted monopoly created by copyrights, patents, and trade secrets; [ii] even the 3.x versions depended mightily on antitrust violations involving DR DOS; and [iii] the dependence on antitrust violations to build, maintain, and extend the monopoly continue to this day. I see scant basis for labeling Windows as a "natural monopoly." Economic theory may blink past the antitrust issues on free market principles, but it may not blink past the government grants of monopolies in similar fashion..
