Bill Gates Swipes at Google

i'm very skeptical of msn's ability to make money on the web, as everything about them is geared towards making money by selling software. they've been on the web for a while and still are slow to move on every front, from creating a browser to entering the digital music market. and their revenue still comes predominantly from stuff that is not directly web-related (i.e. desktop software).

here's a key quote from this zdnet article that i found quite interesting and to be a common symptom of established companies who need to develop new revenue streams because their existing ones are being cannabalized:

And in years past, Microsoft has attempted to build online alternative to Office. One widely rumored project, developed in the late 1990s under the code name "Netdocs", was never made available.

One reason: Infighting between Office executives and Web advocates, according to sources at the time. David Smith, an analyst at Gartner, says that same tension still exists within Microsoft.

"There are different factions within the company, like before, and it is unclear what the corporate strategy is going to be," Smith said.

I know there are very smart people in Microsoft and some of them have influence. There are political battles too but so does any large company. We will have to wait and see. One thing I do know, there are very few huge companies where a ceo/chairman/figurehead is so on the ball and where the company has such a well informed world-view. Yes Google has PHDs, but Microsoft has top brains in .. pretty much everything ..

When Vista comes out Microsoft has a real opportunity to apply it's leverage to search in general. It's be great to see the search market spread more evenly across three major players if Microsoft can reclaim some of Google's market share with an applied strategy - competition can only apply useful selective pressure for consumers and providers alike.

>i'm very skeptical of msn's ability to make money on the web,

Does not matter. Microsoft has many sources of revenue, they don't depend on just the web for their profits like Google does. All Microsoft has to do is deny Google a profit on the web, they don't have to even make one themselves.

MS did the same thing back when they started giving away Word free with every new PC just to gain critical market share over Word Perfect. It's a bit harder to do on the web but Gates just outlined how he's going to go about it - he's going to buy market share and attempt to starve Google out.

all google has to do is buy a little bit back...is there any possible incentive that he could offer users to switch that google couldn't match if it needed to?

I am skeptical of MS's ability to get search out of browser and onto desktop, simply because so many people live in the browser now, but I think they have to get this battle on to their turf..

Wow, Imagine msn giving you $1 for every 10 searches you make in a month. That could totally win over google.

yeah, let me employ 100 3rd world employees to search all day long on MSN and earn me a packet.

I think Bill is nuts.

for click thrus, he will pay you for buying.

If Bill used a portion of PPC revenue and gave it to the consumer in the form of a rebate, coupon or buying credit when they bought from an MSN ppc advertiser, he would shut down adsense in a heartbeat. He would have ecstatic advertisers who would bail on adsense for a better ROI and a legion of bargain hunting shoppers.

Bill could break even on ppc and seriously hurt google.

I doubt advertisers would really be keen about having users of a search engine get paid a percentage of the fee for clicking on the ad. As an advertiser, I'd prefer to see people click on my ads because they're interested in my services, not that they're getting a cut of the money I'm spending.

With an alleged war chest of $50 billion, Bill can do pretty much whatever he turns his attention to.

All he would have to do is *hint* at paying the searcher in order to take $10-15B off of Google's market cap. Oh wait, it sounds like he just did. . .

Instead of playing the AdSense game just move the payments down to the end user and make it a percentage of the total searches as your part of the pie.

Put a nice $100 minimum check amount cap on it, you'll never pay anyone for years.

Many defunct Web 1.0 companies like AllAdvantage tried this and it didnt worked out well. As a advertiser i can confidently say incentivized users are the worst leads.

To expand on this, lets say, if you are in US, and have a checking account and for every 100 searches you do in a month, you get 2% discount on your next office purchase or free windows live software or whatever. think airline miles. not for clicks, but for searches.

> think airline miles. not for clicks, but for searches.

To get airline miles you have to spend money so there is little chance of exploitation but getting "Search points" is essentially free , so in no time the system will be broke due to abuse

Amazon is already giving discounts to regular users of A9.com. There are many ways MS could reward both webmasters and users of MSN search.

If you had to pick the winner, how can you bet against MS?

The company is brilliantly run; IMO, the only company in the same league as MS when it comes to business practices is Wal-Mart.

Google seems strong right now, but does anyone else feel like they've been kicking the sleeping dinosaur?

Not for searching, but for buying, with MSN as the worlds biggest affiliate marketer.