A lot is being written about next year’s Google’s Chrome OS bringing the end of Microsoft… and for good reason.
Craigslist has revenue of $100 million. That’s amazing for such a small company. What’s more amazing is that Craigslist is pretty much all that is left of the $4 BILLION classifieds business. By giving most of it away for free, Craigslist helped in the demise of big newspapers.
Fred Wilson dubbed this model the freemium: Offer your service for free and then charge on the upsell. It works well for many businesses on the Web.
Google has the advantage of having massive revenue from paid search. It funds everything else (kind of like men’s football and basketball generating revenue for most of the other teams on college campuses).
Google has had its eye on Redmond for several years. What was the best way to kill Microsoft? Not to steal its revenue but to evaporate it. Google has taken a two-pronged attack: Google Docs and Chrome OS.
Rumor is that Google Docs will finally be a viable competitor to MS Office next year. How much does it cost to use Google Docs? Oh, nothing… it’s free. It will never do as much as Office but that is a great thing for many people. Imagine your computer running fast with few crashes. Imagine not having a company intent on filling your hard drive.
Chrome OS is due out next year and has the same price tag: Free.
Windows and Office are massive profit centers for Microsoft. Losing those would be like losing, well, everything.
The Break Up of Microsoft
Back when the DOJ was looking into antitrust issues at Microsoft, I argued that the company should be broken up into 4 companies: OS (Windows), Productivity (Office and related software), Web (MSN) and Back office (pretty much everything else). The funny thing was, I thought that Internet Explorer belonged with the OS as it was where the OS was going. I figured that at some point I’d turn on my computer and just see IE (or Windows Explorer as they oddly change the name when I look for files).
The talk today is that Chrome OS doesn’t have a desktop. Sure it does… it’s just displayed inside the browser the way it seemed Microsoft was going years ago. Only Microsoft decided to be more like GM.
Too Big to Fail?
We’ve heard that phrase about the government bailing out banks, car manufacturers and the like. Is Microsoft too big to fail? Yeah, it also has too much cash in the bank. It’s a beast and it will continue to re-form (but probably not reform). Windows Mobile remains only because it’s Microsoft. With tens of billions of dollars in Microsoft Treasury (expect to see dividends slow to a trickle), Microsoft will be around for a long time. It just may be a slow fade.
Technology Half-Life
I remember a blog post a couple of years ago about the half-life of tech companies. [I think it was written by Josh Kopelman of First Round nut I can't find it online. If you have a link, please post it.] IBM ruled for 30 years. Microsoft for 15. It was written when Google had reigned for around 7 years. Maybe the dates were off or maybe Google has found the Tech Fountain of Youth. In any event, this is going to be one helluva fight!
