We all know that Google is the leader in search. Some people used to say Googling instead of searching which implies how Google becomes the default search engine for most of us. When Google becomes undisputed leader in Search it starts to expand it services like Google Map, You tube, Google reader etc. It also provides cloud services like Google Docs, Excel at free of cost to break the Microsoft dominance in Office suite. Microsoft starts feeling the heat and it tries every possible way to sustain its leadership position in Software business.

Google doesn’t give up and it has recently announced that they are developing a Operating System (OS) which sends a warning signal to Microsoft as the OS business is the Bread and Butter for Microsoft. Microsoft earns a major chunk of its revenues from its Windows Operating System and other Software’s like Office suite. In my opinion the best way to defend our self from our competitor is to attack them where it hurts. I think Microsoft realized this and they developed "Bing" a decision (Search) engine which captures a market share of 7% within in a couple of months. This percentage is trivial when compared to Google's 77% market share in search. But this is significant for Microsoft as it’s started getting good reviews for Bing which makes Google to sit and think.

So, what did we infer from the above strategy of Microsoft?

Well, Google's core business is Search and its earning billions of dollars through various advertising programs like Ad sense, Ad words etc. Microsoft's core business is Software and you all know about its earnings from its Operating systems and various software. When Google's search business got stabilized it ventures into various services which I have mentioned earlier. Google has nothing to lose in these additional services like Android OS, Google Docs etc as its search business was flourishing. As there was no significant competition for Google search it didn’t focus much on enhancing its design or features. Microsoft tries to defend itself from Google by announcing cloud office services with limited features at free of cost but it doesn’t stop Google to expand into MS zone.

Then Microsoft start venturing into the development of "Bing" Search engine with features include the listing of search suggestions in real time as queries are entered and a list of related searches based on semantic technology from Power set. This attracted the global users and its market share has started soaring. Google realized that there is no place for complacency and its started to focus on adding more features to Google search engine. Now MS gives back what it received from Google by making inroads into its safe zone.

I feel Microsoft gained two things from its strategy. One is slowing down the progress of Google to gain the MS market share in software business by diverting its focus to its core search business. Second is gaining leads in Search which will eventually add millions of dollars in its software revenue.

Hope you enjoyed my blog.

Thanks

Kathir