Google and Microsoft Partnerships and Rivalries
A key strategy for both Google and Microsoft is to seek out smaller companies that are good at creating certain products or services and then either partnering with them or buying them outright. Both Google and Microsoft have made some high-profile deals that have strengthened their place in the market.
AP Photo/Marcio Jose Sanchez
Yahoo! co-founders Jerry Yang and David Filo -- Yang blocked Microsoft's attempts to purchase Yahoo! in 2008.
In 2005, Google purchased 15 companies for a total of $85 million. These companies ranged from an analytics start up called Urchin to a 3D drawing application called SketchUp [source: Google]. One of Google's largest acquisition deals was for the online advertising company DoubleClick. Google purchased DoubleClick in 2007 for $3.1 billion [source: Economic Times]. Google also has formed partnerships with companies like AOL, NBC and the DISH Network. Most of these deals focus on online or over-the-air advertising.
Microsoft purchased 16 companies in 2008 alone [source: Microsoft]. Like Google, Microsoft looks for companies that provide products or services that complement Microsoft's core business. These companies often become the divisions in Microsoft behind products like the Xbox game console or Zune music player.
Microsoft and Google have battled over some of the same companies. For example, both companies sought to provide search services to Verizon's mobile devices. Google had been providing the services up through 2008. Microsoft offered Verizon a better deal for its search services. Verizon recently switched to Microsoft -- Steve Ballmer, CEO of Microsoft, announced the deal at the 2009 Consumer Electronics Show.
Microsoft and Google have also struggled over another major company: Yahoo. Yahoo experienced financial problems in 2008. Microsoft made a bid to acquire Yahoo. This acquisition would have allowed Microsoft to gain some ground on Google in the search-engine market. But Yahoo executives refused to sell the company for the price Microsoft suggested. Google swept in to make an advertising partnership deal with Yahoo. But the U.S. government objected because that would mean Google would hold a practical monopoly on the search ad sales market. In the end, neither company landed a groundbreaking deal with Yahoo in 2008.
Not everything is a competition between the two companies. Google and Microsoft have joined forces to petition the Federal Communications Commission (FCC). They want to be able to access unused bands in the television frequency spectrum, known as white spaces. Google, Microsoft, HP and Motorola joined forces to create the White Spaces Database Group. This group will submit new protocols and standards companies will have to follow in order to take advantage of the white spaces. Future mobile devices may use this bandwidth to transmit and receive data wirelessly.
