In Google's first decade online, Google and Microsoft didn't seem to be the kind of companies that would compete directly with each other. Google's main product is an Internet search engine and the company's revenue comes from ad sales. Microsoft's main products are an operating system, office productivity suite and other software. Where's the conflict?
Today, there are several points where Microsoft and Google cross paths. The two have taken each other on in their native product categories, and expanded into new markets as well.
Microsoft's direct competitor attempt is a search engine called Bing. Microsoft launched Bing in 2009 as a step above its Live Search and MSN search engines. Its features are similar in look, feel, and function to Google's search. It hasn't boomed in the marketplace yet, though: As of February 2010, Nielsen reported that Microsoft search engines (Bing, Live Search, and MSN) all shared a mere 12.5 percent of online searches, nowhere near Google's whopping 65 percent [source: Nielsen]. It's still not close, even if you add in Microsoft's new 10-year search engine partner Yahoo, at 14 percent.
Google has made an attempt to compete with Microsoft's Office software suite with its Web-based productivity software called Google Docs. Google Docs includes a word processor, spreadsheet application, slideshow presentation maker, and even a form builder and drawing tools, all with the portability of access from any Web browser. It also makes it easy to collaborate with others on a project, with the ability for both users to edit the same document, even at the same time. Google Docs is not as robust and feature-rich as Microsoft Office software, though, and depends on Google for privacy and availability.
Microsoft fired back at Google with Office Live Workspace (OLW), free online collaboration versions of its Microsoft Office products. OLW readily works with files in proprietary Microsoft Office formats for documents, spreadsheets, and presentations. Plus, the SkyDrive gives you 25 GB of space in which to store files [source: Microsoft]. But Microsoft didn't just put OLW together overnight; it leveraged the power of its well-established (though costly) SharePoint software to create the new free Web service [source: Foley].
Both Google and Microsoft have mobile operating system platforms. Yet neither company is close to overtaking the iPhone from Apple, which has close to 60 percent of the market [source: Quantcast]. However, Google Android is also growing rapidly, and it already has twice the share of Windows Mobile [source: Net Applications]. Will Windows Mobile survive? Microsoft is cleverly looking past Android and taking aim directly at the iPhone in promoting its Windows Phone 7, to be released in late 2010.
Besides the mobile platforms, both Google and Microsoft offer Web-based e-mail platforms. Both are investing millions of dollars into cloud computing solutions. And both recognize the growing importance of the Internet for the average consumer. Google may have an advantage over Microsoft because it's a Web-based company; however, Microsoft has decades of experience in application development and consumer research. Let's look at some of the strengths and weaknesses of each company.