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How Did Microsoft Become the Underdog?

 
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I realized last week that somehow inexplicably, Microsoft has become the underdog. Want proof? The US Justice Department *and* the EU approved the search deal with Yahoo! That the United States approved the deal is not really news because Justice has rarely met a deal it didn't like no matter how bad it might have looked, but the words it used suggested that this deal was necessary to check Google's growing power in consumer internet search.

The question is how did we get here and how did Microsoft, a company with more than $40 billion in the bank suddenly find itself in second (or even third place) in the on-going battle for technology dominance?

Bing

Mac World reported on the Justice Department's statement:

The Commission said its investigation shows that market participants expect the Microsoft-Yahoo deal “to increase competition in Internet search and search advertising by allowing Microsoft to become a stronger competitor to Google.”

So Bing is suddenly the big hope against Google's growing dominance? What's interesting to me is that if you look at data from Comscore, Google search traffic has basically held steady, while Bing's has increased slightly and Yahoo's has decreased slightly. What does that mean? It means that Bing is capturing traffic, but not from its rival. It's taking traffic from its partner.

With Bing running its backend, it also makes you wonder, exactly why anyone would use Yahoo! moving forward. One of Bing's strengths is its attractive interface. Yahoo! doesn't really have much to differentiate itself after this deal goes through, so how does this help Yahoo! or Bing?

Regardless, Microsoft is back in the pack looking up at a market leader, and search is not the only place where you're seeing this.

Windows Phone 7

Last Week, Microsoft released Windows Phone 7. It has XBox games and Zune music services. It has access to Office and SharePoint, and it's pretty, but does it matter? It won't actually be appearing on phones until sometime in the Fall, an eternity in the cell phone market in which Microsoft finds itself hopelessly behind the market leaders. Microsoft seems to have become an afterthought in search and in mobile. How did this company that once dominated reach this point?

Google and Apple are Looking Uglier All the Time

Meanwhile, Google hasn't been making a lot of friends lately with its botched release of Google Buzz, and Apple is looking dicatorial with its militant anti-Flash rhetoric and its decision to remove all pornographic material from the App Store. Yet these companies have lurched ahead of Microsoft in mobile and search.

Microsoft can take heart though because it has that big cash reserve, which gives it years to find its way back. Combine that with a fickle consuming public and (as they are well aware) things can change fast.

 
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Why is Microsoft playing catchup, lack of communication and infighting.
Why is Google losing ground, fragmentation of services.
Why is Apple being criticized, overcontrolling.

Who has the easiest road to recovery, probably Apple.
Google needs to expand the Google Dashboard service and work harder to integrate products while understanding that different products require different settings. That's why Google Buzz was failing, they didn't consider the consequences of merging e-mail and Microblogging.
Apple needs to actually become transparent about Apps, and create an adult store for iThings.
Microsoft needs understand cross-platform needs and cross-platform integration. Look at Dropbox, it works with Linux, Mac, Windows and iPhone, and has Android and Blackberry on the way.

 
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Apple is not being dictatorial about Flash; Flash simply doesn't work for multitouch screens like the iPad Touch, the iPhone or the iPad. Flash depends on roll-overs by the mouse pointer and you can't get that to work on multi-touch. It is just ancient software.

Apple allows Flash on its Notebooks and Desktops where it causes endless problems. It is a CPU hog. It is buggy and distracting. I have disabled Flash by installing Click4Flash. The web is much nicer and I don't have put up with those distracting ads. I haven't missed a thing.

 
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Microsoft is simply not the behemoth world dominating company it's being portrayed as being by its enemies.
It's a company that's strong (very strong even) in some markets, a big but not dominant player in others, and a small contender in others again.

Its operating systems and office software are effectively the world standard.
Its game and hardware divisions are strong players but nowhere near market leaders (let alone defining the landscape).
Its search engine and some other products are small in comparison to major competitors.
If they want to grow those branches, I wish them success. I've no love for Google, think they're too dominant and have some very shady business practices (especially when it comes to privacy and data security as well as their censorship of things the owners don't like known through their blogging and search engine systems among others) and would love to see a strong competitor in that market especially (I exclusively use other services but Google as is).

 
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jwenting said:
"Microsoft is simply not the behemoth world dominating company it's being portrayed as being by its enemies."

I suggest that you read some of Microsoft's history, before you say that. Microsoft's management has acted ruthlessly and unethically. They didn't get their monopoly through merit, they got it through underhanded behavior. Their failure to take over other areas than operating systems and office suites is due to simple incompetence.

http://www.roughlydrafted.com/RD/Q4.06/3EC02E78-FD4D-4CDF-92A0-9C4CBDFAB3D2.html

Microsoft pays people to lie about its competitors through using Fear, Uncertainty and Doubt. It has retarded technological improvements through its greed.

http://rixstep.com/1/20100119,00.shtml

Microsoft is deservedly in decline, because it creates second rate software. The computer world will be better off when the Windows OS is dead. The Windows OS was never designed for anything more than a Stand Alone disk system on a secure Local Area Network; it cannot withstand the rigors of the Internet. It has spawned the malware market costing the computer industry billions of dollars every year.

http://rixstep.com/2/20090601,00.shtml

Windows Seven will not solve its underlying security problems.

http://rixstep.com/2/20090726,00.shtml
http://rixstep.com/2/20100214,00.shtml
http://rixstep.com/2/20100219,00.shtml

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