Microsoft Corp V/s Google V/s Yahoo! Inc.
Continued from my previous post Why Online Ad Models threaten Microsoft Corp.?
The core reason that has Microsoft worried after seeing the growth and product release trajectory of Google and Yahoo! is that both these companies could commoditize Microsoft’s "only our software (running on our OS) for sale" business model. The Open Source movement has already badly hurt Microsoft.
The Ad Model coupled with the Open Source Movement could potentially make Microsoft a non-entity within some years. Why?
Microsoft makes Windows, Office Software, Browser, Media Players and offers all of these for a price. (Browser and Media Player are free because competitiors offer the same free).
However, Google and Yahoo! compete by earning advertising dollars by showing advertisements to users that visit their websites, register with them, and/or download software from them. Both Google and Yahoo! offer free applications that *could have come* from Microsoft and users could have had to pay for them. Commoditization of its software is Microsoft Corp’s (MSFT) core worry. A Knowledge@Wharton Article says just that:
Tags: 185, 196Microsoft understands that software, its core business, is becoming increasingly commoditized. It needs to find new revenue streams if it wants to keep growing," says Wharton legal studies and business ethics professor Kevin Werbach. "Across the computer industry, value is moving from the desktop to network-connected services. Integrating software, hardware, content and services, as Apple has done so effectively with the iPod, can be a wonderful business model if you can do it right.
2 opinions for Microsoft Corp V/s Google V/s Yahoo! Inc.
arjun
Dec 12, 2006 at 2:11 am
somewhere down the line in your opinion, you forgot to mention that even the awesome ad based revenue collection system of both google and yahoo! are reeling with what has come to be known as ‘click fraud’. the consequence of this fraud could be a change in the entire advertising revenue model which could change the entire internet media scape…
u can check out my opinion on
http://siliconsentient.blogspot.com
Ujwal Tickoo
Dec 12, 2006 at 2:22 am
Good point Arjun. If advertisers lose trust in the Ad Revenue Model that would be a big problem to both Goog and Yahoo! However, I think its less likely that that would happen. The interesting thing on the web is that via web logs number of unique users etc can be easily found out and shared with Advertisers.
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