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Tuesday, October 26, 2004Google's Deskbar is included in Microsoft's Partner Pack for Windows, a collection of Microsoft and third-party products released last week that Microsoft describes on its Web site as "the ultimate application package" for a Windows XP PC. The Deskbar adds a search box to the Windows taskbar, allowing users to search the Web with Google without having to start a Web browser.Joris wanted to know how Microsoft could seemingly promote Google technology while competing against it. Joe Wilcox,Jupiter Research analyst offers this explanation. . Microsoft's biggest challenge right now is promoting Windows XP's capabilities. JupiterResearch views XP's adoption as modest, at best, with most businesses still running older versions of the operating system and most households running XP and/or another Windows version. Over the last couple months, Microsoft has stepped up XP evangelism, in part by showing the capability of partner products that extend the operating system’s capabilities. The products available with the Partner Pack are consistent with that approach.At the same time, the MSN division, which brings a fraction of what Windows Client contributes to Microsoft revenues, is looking to expand its search capabilities in competition to Google and Yahoo!. It makes sense that Microsoft would choose to promote competing Google technologies. After all, Windows is Microsoft’s cash cow and most valued asset. And like many other Microsoft competitors, Google also is a valued partner. Notice that Google’s recent desktop search utility, while competing with MSN search capabilities coming in the future, runs only on Windows. So, Microsoft has as much reason to promote Google technology as compete with it.
The apparent contradictory behavior with respect to Google illustrates a much bigger Microsoft problem. The company has evolved from a strictly platform provider into one that also offers applications. Increasingly, the approach puts Microsoft in competition with partners providing valuable technologies for the Windows platform. Google is a classic example of a partner-competitor. While the MSN Search folks may be in hot competition with Google, for the Windows platform Google is a valuable partner. Hence, Microsoft’s apparent contradictory behavior, where executives publicly target Google as a search competitor, while the software giant promotes its competitors’ technology in the Partner Pack.
The platforms and applications businesses as creating unnecessary conflict between Microsoft and its partners, a situation that makes Linux more appealing than Windows to some developers. Windows succeeded because third parties could make money on the platform. That is not as sure a prospect when Microsoft’s applications business competes with its platform developers’ products.
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