Google's Competitive Advantage: It Leverages "The Power of Free"
The New York Times Nails Google's Competitive Advantage
By: Jeremy Geelan
Feb. 4, 2008 04:30 AM
Would Microsoft be able to use its eventual acquisition of Yahoo! to "shake its obsession with catching Google and instead look to the next generation of the Internet," asked John Markoff in The New York Times yesterday. Writing in his popular "Silicon Valley Memo," Markoff nailed the one thing that Google 'gets' that Microsoft doesn't (yet): how to leverage 'The Power of Free.'
"Belying its bloodless title - "Internet Software Services" - the memo was intended to sound an alarm, to warn the company that a new revolution in computing was under way, and that it threatened to upend Microsoft's traditional business."Gates wrote, somewhat understatedly, that this "will be very disruptive." And three years on, his $44.6BN bid for Yahoo! is Microsoft's biggest ever attempt to respond to that disruption.
But it it too late?
"Now Microsoft is trying to make up ground by buying what it has not been able to build," wrote Markoff. But he noted a major barrier: "Ultimately, Microsoft’s challenge in making its new acquisition work will be a cultural one."
Pointing out that Redmond, WA, is no fewer than 850 miles away from Silicon Valley where Yahoo! is based, Markoff wondered out loud if Microsoft can truly "use a huge acquisition to tap into what makes the Valley tick?"
"Will it force Microsoft to look forward instead of backward?" asked Markoff towards the end of his column in The New York Times. If it doesn't, then even Microsoft+Yahoo! will not, ever, equal Google.Google's secret, according to Markoff, is as follows:
Only time will tell if Microsoft can, via Yahoo!, tap into that same power source.
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