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When business historians look back,this past weekend of May 28-31st 2009 will mark not just the GM downfall but also when Google officially took over from Microsoft as being the number one software company in the World. Some will argue that Microsoft had long ceded the number one position with its brand-ruining Vista operating system, second rate IE8 browser and its ill-conceived Web hampering strategy. Others will say that Google is a one dog show dependent almost entirely on ad revenues while YouTube and other ventures just leak money. So where is the substance to crown Google as Software King?
The Transition Events
Some will say the transition came when Google’s announcement of Google Wave eclipsed and completely drowned out Microsoft’s coming out party for its new Bing Web search engine on the same day. It is reasonable to note that the Google Wave announcement video has already had over 1,000,000 hits on YouTube this weekend while Bing is sitting at 35,000 views. But the real impact of Google Wave is threefold:
1)that Google demonstrated it has wrested developers mindshare decisively from Redmond;
2)that Google are now the masters of Web development replacing Microsoft whose IE8 browser wanes badly in Enterprise performance and whose Web tools are Windows and proprietary-oriented;
3)that Google now has in Google Wave an Open Source platform that will a)lead Web development and b) could inflict damage on Microsoft’s profitable Exchange and fast-growing Sharepoint products.
The new Google Money-makers and Money-takers
The newly strengthened Google Apps is an example of a Money-maker and a Money-taker. Google Apps is only a small money-maker and with the new improvements is still just catching up with the Zoho online Office suite. But Google Apps is a significant money-taker because it forces Microsoft to do two things: 1)enter the online Office market with a serious product and 2)nearly give away the Redmond online Office product for free in order to compete with Google, Zoho and others.
Google Android is a money-maker and money-taker too. A money-maker because on Netbooks Google Android is starting to appear on more major Netbook vendors product lines including Dell, HTC/T-Mobile and start-up ($250 per Netbook machine)Skytone. The word is that Google makes between $3-8/machine versus $10-35 for Windows XP. So if Android does well on Netbooks it will also be a money-taker from Redmond which sewed up 80% of the Netbook market when it resurrected Windows XP in August 2008. Meanwhile Android is also doing well in the smartphone market with Acer, AT&T, China’s Huawei, Motorola, and Sony Ericsson all producing Android models. How much money these make for Google is still guarded. But the sleeper and stealth moneymaker announcement for Google Books on the Google Wave Weekend was reported by the NYTimes:
“In discussions with publishers at the annual BookExpo convention in New York over the weekend, Google signaled its intent to introduce a program that would enable publishers to sell digital versions of their newest books direct to consumers through Google. The move would pit Google against Amazon.com, which is seeking to control the e-book market with the versions it sells for its Kindle reading device.”
The signifigance of the announcement is that Google is clearly squaring off for a piece of the book sales side of Amazon’s Kindle business while Apple seems to be targeting the hardware side with its much rumored touch tablet. Google will be a money-taker from Amazon.
So clearly, Google is setting in place a whole range of real income streams while at the same time establishing on the software side a mystique and delivery credibility that is enjoyed on the hardware side by Apple. The two will inevitably overlap and clash .. the iPhone OS and Android already do. But for now Apple can be the King of Hardware while Google ascended to the throne for Software this weekend.