theknowledgebase

Farhad Manjoo wrote an interesting article that suggests Microsoft buy Palm instead of Yahoo’s search business. The reasoning behind the idea is that Microsoft could beat Google in the hand held market. Matt Arsay agrees; and while they did understand that Microsoft’s revenue stems from selling software, and that Google is their main competitor, they’re missing the direction of Microsoft’s actions. What is needed is clarification on what business Microsoft is really in, and how Google is positioned to dethrone Microsoft, and why Microsoft is pursuing Yahoo.

Microsoft controls a platform, not just an operating system. They control every aspect of running a business on a computer and profit at every turn. Everything about how Microsoft makes it’s money is based on the fact that it runs on a Microsoft operating system. Their business plan is to keep technology from branching out, and out of their control.

In the early years of office, word would not accept files from other text editors. Even though it worked perfectly going the other way. They were denying other suites from being compatible with theirs, thus if you wanted to send a document to a co-worker you were forced to be on the same program. This is an example of Microsoft’s business practices to dominate the sector. It is still prevalent today. You are either completely on Microsoft’s platform or you are completely off of it. Microsoft beat many competitors this way; this is the sword they live by. It is the sword they will die by.

Google is their main competitor.  Not because they’re dominating search or search ad revenue; but because they are pushing a platform that completely undermines Microsoft’s business model. With this new platform Google won’t just beat Microsoft, everyone will. This platform is not Android, it’s not even Linux. It’s the internet.

Once people realize they can create all of their apps to run on the internet, they’ll remove their dependency on Microsoft. People will not be required to buy Pc’s, they could run the same app on OSX, OS/2, or linux. It won’t matter what phone you buy either, you can run the internet app on it. There’s no need for Office when you can just use an internet app like Google documents. There’s no need for Windows when everything runs off the internet.

The proverbial rug is being pulled from underneath Microsoft’s feet. Microsoft wants Yahoo because it is desperately trying to deny Google full and complete control over the internet. They are doing everything in their power to get people to develop on Microsoft’s version of the Internet platform. (They even called it .net!)  They want to turn it into the next windows. They want to use Yahoo as their sword to fend off the internet.

Microsoft will fail and they will not be the dominate company they once were. They will find other ways to make money and maintain a respectable business. History will repeat itself as IBM once stood alone on top of the computer world. Now Google is leading the coup d’état against Microsoft.

P.S. Next time I might talk about how Microsoft has a two mobile OS’s. One of them is good but not successful, and the other is successful but not good.