In a way, this is almost like deja vu for me, as in the early days of the computer business the talk of one vendor trying to kill the other was what kept you fired up, particularly when it was you the other vendor was trying to kill. In the Google-Microsoft battle, clearly the rhetoric on Microsoft's side is there, but I wonder if it realizes that Google is deadly serious about truly wanting to kill Microsoft and sees putting Microsoft down as more than a business obligation. It's more of a moral or lifetime goal.
So this isn't deja vu at all, really, because in the early days people knew they didn't really want to "kill" anyone; they just wanted to beat them in the market. But the folks that came up through school during the Linux-Microsoft battles do, in fact, view Microsoft as an evil that needs to be eliminated and appear to have focused Google on doing exactly that. This could become a problem for Google.
For Google, this goes to the core of its strategy. It increases the likelihood of both its success and its risk because it will sacrifice revenue and profitability to achieve its goal -- to put Microsoft out of business. It may cross anti-trust lines first, as well, putting it at serious risk.
Making It Personal
Generally, when someone makes a business battle personal like this, it can become both excessively expensive and terminally stupid. But Google is throwing off a lot of cash, and Microsoft does represent a legitimate risk to the firm. Plus, Google appears to be going about this systematically, almost as if someone, for a master's project, worked out a detailed strategic plan as to how to hurt Microsoft.
So, in this case, the personal aspect is resulting in focus and the willingness to trade off profitability for success, but has not yet resulted in any critical Google mistakes.
The Fluid Kill-Microsoft Plan
The goal appears to be to first strip the value from Microsoft's key desktop properties and then deliver the decisive blow with a platform shift to the Android offering. Since the goal is not to steal Microsoft's revenue, at least initially, but to keep Microsoft from getting it, the task is vastly simpler.
The plan has been in motion for some time as Google slipped gadgets, search bars and Google home pages onto new PCs and into new applications people purchased over the last year, but it finally became visible when it started negotiating with Yahoo to control Yahoo's search advertising revenue (the asset that Microsoft really wanted). This both lowers the value of Yahoo to Microsoft, if successful, and gives Google that value until the merger concludes.
Google then moves aggressively against the culmination of the merger in multiple geographies to ensure the merger cannot close while it continues with the benefits Microsoft is barred from. The obvious reason is to preserve the revenue and partnership; the actual reason is to deny this revenue to Microsoft and tie the company up as it focuses on Yahoo.
Much like with the wireless spectrum auction, Google gets substantial financial benefits while incurring little or no cost. This is called "gaming the system;" Google appears to be a master of it.
Google's Possible Bridge Too Far
The danger for Google is that it is at 70 percent share; that puts it under the same anti-trust microscope that has been so painful to Microsoft. If it can be proven that its goal is to deny a much smaller competitor market access in a market it virtually controls, the same guns that shot Microsoft get aimed at Google. The DOJ's aim, with regard to technology, has likely improved substantially since it took on Microsoft.
Up until now, one of Google's biggest strengths has been flying under the radar, but that could have been lost with this latest Yahoo move.
Can Google Succeed, Can Microsoft Be killed?
The only way to take out a company as diverse and widespread as Microsoft is to change the economic model that supports it and for the company itself to make mistakes. Google is driving one and attempting to assure the other by keeping Microsoft distracted, but it is putting itself at increased risk in the process. In addition, killing Microsoft is probably an unreachable goal because you can't deliver a killing blow quickly enough. At some point, Microsoft will respond, but Google could drive itself down to much less significance and you only have to look at IBM, in the early 90s, to see that possibility. In the end, the Google strategy appears to be a solid and well-thought-out one; the only near-term question is whether it crossed a critical anti-trust line with Yahoo in trying to partner and whether that result puts it at more risk than Microsoft.
This will be fascinating to watch.