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Google vs Microsoft
Transcript of Google vs Microsoft
Table 3. (a) Why did Microsoft attempt to acquire Yahoo?
(b) How did it affect its business model?
(c) Do you believe this was a good move? List of Questions 2. (a) Has the Internet taken over the PC desktop as the center of action? Why or why not? 1.Describe the business (products, services, etc.), strategies, operations and innovations of:
(a) Microsoft, and (b) Google 4.Can Google overtake Microsoft? Who will prevail? Justify your answer. Microsoft We all know that... Or perhaps, we don't after all! Founded in 1975 by Bill Gates
Billionaire at age 31 Google PRODUCTS & SERVICES Microsoft WEB Browser CHROME Internet Explorer Search Engine GOOGLE SEARCH BING Bar Operation System (PC) Google Chrome OS Microsoft Windows Operation System (HP) Android windows phone Other Product and Services Michael Porter’s Generic Strategies Business Strategies
Internet Based Product & services
Online advertising Business
96% of Google's $37.9 billion 2011 revenue came from advertising
Highly differentiated due to its product excellence
eg. Windows XP (winner of the award
"For Technical Excellence" in the
category of desktop software from
PC Magazine) Constant innovation of web-based product and services
Improve and enhance existing product and services
Used these products as an avenue for its advertising business
Acquisition of promising start-ups / businesses, bringing them into the fold eg: Android, YouTube Business Operations
Timeline of key events
Feb 1 2008 – Microsoft bids a whopping $44.6 billion for Yahoo ($31/share)
Yahoo’s shares increased 53.5% to $29.45 and Microsoft’s by 1.9% to $32 after the announcement of a possible takeover
Feb 7 2008 – Microsoft’s Steve Ballmer received a letter from Yahoo’s chairman indicating that the view of the Yahoo board is that ‘now is not the right time from the perspective of Yahoo’s shareholders to enter into discussions regarding an acquisition transaction.” In other words, it is a subtle rejection.
Feb 11 2008 – Yahoo confirms that it has rejected bid from Microsoft, on grounds that it believes Microsoft’s proposal substantially undervalues Yahoo.
May 3 2008 – Microsoft withdraws bids CEO Ballmer said that despite raising the offer by approximately $5 billion, Yahoo had not moved towards accepting it and the economics demanded by Yahoo did not make sense for Microsoft. Thus, the deal fell through. 1. The Google factor
2. Taking Yahoo (a key rival) out of the game Why did Microsoft want to do so? Declining stock prices for both Microsoft and Yahoo because they were unable to compete with Google
Google straying into Microsoft's 'territory' competing not just for advertising revenue but rivaling core Microsoft products like email and word processing.
Growing importance of mobile internet space VS PC business The Google factor Yahoo as a key rival Microsoft also believed that the combined company can offer a superior business model.
Microsoft is promising that together with Yahoo it can offer "a competitive choice" that offers "more value... to advertisers, publishers and consumers".
It also gives Microsoft access to Yahoo's community strengths - websites like the popular photo-sharing website Flickr - and strengthens areas that the two firms compete around now, like communications and advertising.
Microsoft and Yahoo could also benefit from combining their engineering teams. As the online and offline worlds merge and blur in this second internet age companies need the talent to scale their products and offerings. How does it affect Microsoft’s business model? We believe that Microsoft has made a good move.
With the expertise of the staff from both Microsoft and Yahoo, Microsoft could be in a better position to take on its rival, Google. It could also compete with Google on more grounds because of the difference in areas Microsoft and Yahoo focused and has a niche market on. Our Views Microsoft's attempt to acquire 2) Has the internet taken over the PC Desktop as the center of Action? Why or why not? Example
Microsoft Office VS Google Docs
Big Corporations tend to favour Microsoft Office for security and functionality issues
2010 Survey reveals that
81% uses Microsoft Office
4% uses Google Apps
Less updates = less compatibility and risks involved Stop at 1min Google 2008 Annual Revenue hit $60billion 1992-1995 they dominated the corporate market Partnered IBM in 1980
Went public in 1986 Mission: "Organise all the world's information and make it universally accessible and useful" Founded by Larry Page and Sergey Brin
In 1996, they set up 'Backrub' search engine
In 1998, Google Inc was formed The battle in the cloud GMAIL + Google calendar
Google App Engine Microsoft Exchange online
Microsoft office webapps
Microsoft Windows Azure
Begin as a search company
Believes in internet maturation
Google's business model: Web-based cloud computing Business Strategies
Build its success around desktop computing
Embrace the internet while retaining the desktop as a focal point
Purpose of usage
Level of support Center of social interaction The PC is where work is completed, reports are written, and data is primarily saved
The center action still revolves around that of the desktop However, some businesses do utilize the internet to do their main operations WHY?
Inexpensive Target Audience?
Small to medium enterprises
Students Microsoft Business Operations GOOGLE 5 different product divisions 1.Windows and Windows Live Division
3.Server and Tools Division
4.Entertainment and Devices
5.Online Services INNOVATION Ideas come from everywhere
Share everything you can
You’re Brilliant. We’re Hiring
A license to pursue dreams
Innovation not instant perfection
Data is apolitical
Creativity loves Constraints
Users not money
Don’t kill projects, morph them 9 principles of innovation INNOVATION
• Computer science and software engineering
•More than 800 professional researchers
•Thirteen research and development labs world wide
•Innovation from not only its R&D, but also acquiring innovative start-ups WHO's more Innovative?? ? Forbes World’s Most Innovative Companies 2012
Google rank 7th
Microsoft??? 86th VS Examples 71% of U.S. web users have Facebook account
98% of the world's most popular brands uses Facebook
Not to mention Pinterest and Instagram
64% USES MARKETING WHY? Global Audience
Free platform for advertisement No, not yet Despite the growing trend, there's still fundamental issues that need to be dealt with before it can prove to be reliable. Basically, has the platform for computing task sHIFTED?
Internet = Web services
Desktop = Client applications Analysis BPOS BREWING RIVALRY?
MICROSOFT'S ATTACK Ideas This is a huge mountain HEAD-ON COMPETITION Was it... Or...? Based on our research, Microsoft is not without facts. Out of Google's $10.6 billion in revenue, only $420 million came from something besides advertising!
That's about 96% of Google's revenue that came from adverts! R&D Sharing its underlying importance Factors to consider