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August 31, 2009 12:54 PM

Microsoft vs. the World



A lot of news zinging around the Internets this weekend focused on Microsoft's supposed "Screw Google" meetings being held in Washington, D.C. The idea, allegedly, is for the gathered lobbyists and consultants to dream up new and exciting ways to stick it to the search-engine giant.

Ginny Terzano, a spokesperson for Microsoft, admitted to Daily Finance that Google had arisen as a topic of discussion during Redmond's consultations with regulators and lawmakers, but also said that the idea of weekly "Screw Google" meetings was "absurd."

Did anyone really expect Microsoft to say anything different? Exactly. Whether or not the chatter from anonymous sources "in the know" eventually proves correct, it's not considered a good strategy these days for a company to out-and-out admit that it wants to crush its rivals like a roach.

The rumors do illustrate, however, just how embattled Microsoft must feel at the moment. Let's diagram the battleground:

Microsoft vs. Apple: An interesting Aug. 30 article in The New York Times highlighted some new aspects of the ad-war between Microsoft and Apple. The piece cited a study by TNS Media Intelligence that showed Apple's television ad-spend in 2008 at $264 million, "71 percent more than Microsoft." From January through June of this year, however, Microsoft burned through some $164 million in television-advertising dollars, "more than twice Apple's spending."

Despite Microsoft CEO Steve Ballmer's claims that Apple bears no threat to Microsoft's market share, that sheer amount of ad spend suggests that Redmond clearly sees Steve Jobs as a threat - at least in the area of high-end PCs and notebooks, where Apple controls a sizable share of the market. Given that Microsoft's margins for Windows 7 will likely be higher if its ecosystem partners sell more high-end systems with the full operating system installed, that market is also a vital one for Microsoft if it wants to reverse its flagging revenues.

Microsoft vs. Google vs. Yahoo: Although Microsoft hasn't broken that number out, I'm assuming at least a portion of those advertising dollars went towards promoting Bing, which separate reports have cited as having a marketing budget in the $80 million to $100 million range. Even more so than the advertising dollars, Microsoft made a major competitive thrust against Google's dominance of the search-engine market when it announced the 10-year partnership deal with Yahoo on July 29.

That deal, in which Bing will be integrated as the backroom search-engine for Yahoo's sites, will increase Microsoft's U.S search-engine market share to nearly 30 percent - although Google's 65-percent market share continues to give it a comfortable lead. In addition, Yahoo has been asserting that, despite its newfound lack of a search engine, it will still compete with Microsoft in areas such as e-mail and front-end user experience.

Microsoft vs. Everyone Else: The problem with being a company the size of Microsoft, of course, is that you end up battling on multiple fronts against a variety of competitors. Companies such as VMware and Citrix Systems have opened up challenges to Redmond on the virtualization front, even with Microsoft's release of Hyper-V in Windows Server 2008. A combination of proprietary-software giants such as Oracle, along with various open-source vendors, continue to battle for market share against many of Microsoft's key business lines.

So, with all that taken into account, is it really any surprise that Microsoft would be hosting meetings to figure out how to best apply leverage against its fiercest competitors?

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Comments (5)

insider :

Wait, if MS spent $167 million, out of which $80mil to $100 mil to promote Bing, it means it spent $70mil to $90 mil against Apple.

You cannot double-count ad dollars as a proof of recognized competition.

fu@anarchy.com :

Well, Google and the rest of the Silicon Valley a-holes conspired with with Clinton adminstration and the California Democratic leadership to screw Microsoft, so good... payback is a b*tch...

Nick says: "it's not considered a good strategy these days for a company to out-and-out admit that it wants to crush its rivals like a roach." (But M$ does know its an effective way.)

And I agree with Nick, this is very wrong. This is the same M$ that killed tried to kill Netscape and ended up in court with anti-trust trials. M$ has not changed one little bit. Maybe this time Google will look into suing MS. Why not?

The proven way to compete is to build a better product, but this type of low behavior clearly shows that M$ cannot do that. Instead, it is most likely funding astroturfers and agencies to "screw google" as Nick puts it. Anyone notice that its more than just the advertising bucks and the search business now with Google. Most likely since the recent announcement of ChromeOS from Google this and the Yahoo deal is what is causing M$ to let loose the dogs on Google.

Hello,

Earlier This Year, I Used To Receive The M$-Watch Newsletter.

Now I Do Not, And When I Try To Subscribe To It, I Get The Message:

"We were unable to register you for * Watch Newsletter, please click Back and try again."

Anyone There ?

Mike :

Now it's "MS against it's own customers". Has anyone noticed the furor over hotmail being switched to pop3?Thousands of customers that hate it and all MS supplies are drones to spew the corporate doctrine.There are a lot of new converts to gmail as a result, myself included.In the immortal words of Rodney Dangerfield: "F...me?No, F... YOU!"

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