Entrepreneur Watch

Google is the new Microsoft. Apple is the new Apple

UPDATE, July, 2010

There is no longer any doubt: Google is becoming the new Microsoft. In the rise of the age of the personal computer in the 1980s, Microsoft positioned itself as the dominant software provider for the PC, becoming one of the largest technology companies in the world. Today, with the continued and rapid expansion of the Internet, Google is fast becoming the dominant supplier of software for the Internet. It is destined to become the leading Internet software company.

Google is no longer just a search company. It is now a rising presence in Web browsers, mobile phone software, email, online maps, blogging software, language translation services, productivity software, and online video--all technologies that touch and are being transformed by the Internet. 

It is showing great promise in new products for searching and communicating in real time, free telephony service, and social networking (TechCrunch reports it is buying Facebook apps maker Slide.) 

The Android is a hit. The figures may change when sales of the iPhone 4 come out, but research firm NPD reports that Android phones are now outselling both the iPhone and the Blackberry.

It is working on a desktop operating system, a tablet computer to compete with Apple’s iPad, a new social network called ‘Google Me’, the long-rumored GDrive that will automatically synchronize everything on your personal computer with a personal online storage system, and many other projects that have not yet come to light.

This is all part of Larry Page’s and Sergey Brin’s strategy to push the development of the Internet as quickly as possible and to become the leading software company of the Internet Age. It will, of course, also increase Google’s wealth as more people get online and expand its advertising revenues.

The advantage Google has in each of these areas is three-fold. The first is its powerful and dominant Internet advertising business, which enables the company to offer many free products, a capability that companies such as Microsoft and Apple will find difficult to match.

The second is its incredible wealth and willingness to invest heavily in these new areas with little concern for how it affects the company’s stock price. Its stock continues to swing widely, anathema to most public companies. Since going public at $85 per share in 2004, its stock peaked at over $700 per share in 1997, dropping to $262 a year later, and recovering to $620 a year after that. Between January and July of 2010, its stock again lost over a quarter of its value to bottom out at $436. Microsoft executives would be apoplectic over such gyrations.

Still, Larry and Sergey are willing to reach deep into their hoard of cash to buy other promising companies. As of mid-2010 Google has spent many billions to buy or invest in about 75 companies to boost its technology and offerings. It has its own venture capital fund, Google Ventures, seeded with $100 million, to invest in promising start-up companies. This makes it unlikely that some brilliant entrepreneurs will blindside Google with a powerful new technology, at least as long as the Internet continues to be the dominant platform in computing.

Microsoft will fade against the Google onslaught, just as IBM faded in the wake of Microsoft’s rise two decades ago. Interestingly, if Microsoft is the new IBM and Google is the new Microsoft, which company will be the new Apple? The answer is simple: Apple.

Right now, with the brilliant Steve Jobs back at the helm of Apple, it is continuing to innovate, in online music, mobile phones and portable computer platforms. But Apple is falling into the same position it had relative to Microsoft in the PC Age; high-end products that have a loyal following and high prices, but much lower market share. It is the Jaguar of the computer and Internet world, while Google is the Honda or Toyota. That’s because Steve Jobs is pursuing his old approach--creating integrated hardware and proprietary software that he stubbornly controls.

Microsoft dominated and set the standards for computing because it focused only on software, courting every PC maker in the world to use its products. Today, Jobs strictly controls the manufacturing, the components and the applications of products such as the iPod, the iPhone and the iPad. Larry Page and Sergey Brin, however, are seeking deals with all the major PC, mobile phone and other manufacturers and service providers whose business touches the Intnernet. That will, in the end, give Google the largest market share.

Why? Consider the Android smartphone OS. Google licenses it the way Microsoft licenses Windows. Android is available on more than 60 devices and several mobile networks, and the applications do not have to be cleared by the man at the top. Apple’s iOS is available only on the iPhone and AT&T’s network, although there are rumors that it will finally become available for the Verizon Wireless network soon. Market researcher Gartner predicts that Android will pass the iPhone in market share in 2012. The Blackberry is still the most popular “smart phone”, but it is losing momentum.

Even Apple’s customers are starting to rebel. A research firm called Vision Critical surveyed iPhone users to find out what they think their phones lack, and the list of features they came up with reads like a list of technology already available on the newest Android phones. The list includes the ability to run on a choice of wireless carriers, the ability to run on a 4G network, an 8 megapixel camera, a larger display, a removable battery and a physical keyboard. Apple may start adding such features, but Steve Jobs stubbornly believes that he knows what’s best for customers--and for Apple--and is known for ignoring such feedback. Android phone manufacturers can provide whatever features they wish.

Of course, becoming the new Microsoft also puts a lot of heavy baggage on Google’s flight. Government agencies around the world are scrutinizing its moves for antitrust violations. In early July, 2010, the European Union’s antitrust chief said he was looking “very carefully” at allegations that Google unfairly ranks competitors’ sites lower in search results. The irony here is that one of the main reasons Google became successful in the first place is that it alone among all the major search engines refused to bias its search results. There is no discernible evidence that Larry and Sergey have changed their strategy now. Type any company stock ticker name into Google, for example, and Yahoo Finance appears above Google Finance. Larry and Sergey have always been adamant that search results must always be unbiased. But competitors complain and regulators, wary of Google’s increasing power, will listen.

Controversies surrounding Google’s tactics continue unabated. News organizations such as Rupert Murdoch’s News Corp. are still threatening Google with lawsuits for stealing snippets of news from his publications. Viacom was dealt a setback in its suit against YouTube over copyright infringement when a U.S. court ruled against Viacom in June 2010, but Viacom says it will appeal.

More and more people are also becoming skeptical about Google’s “Don’t Be Evil” philosophy. That philosophy is being put to its biggest test now as it struggles with the Chinese government over censorship. When hackers broke into Google customers’ email accounts in China in early 2010, Sergey was irate. Saying that the hack targeted Chinese dissidents, he made it clear that he thought the attack had government backing. It pushed Sergey too far, and he announced that Google was no longer willing to censor itself in China. Google moved its operations to Hong Kong, where the laws are more liberal, and stopped censoring its search results. But it has to renew its license to continue doing business in China every year. Google recently renewed its license to do business in China, but it still struggles with the censorship issue, and China recently blocked.

Leaving China would be an enormous blow to Google’s future. Microsoft CEO Steve Ballmer has made it clear that he has no problem doing business in China and censoring his company’s search results, and the Chinese search engine Baidu continues to gain market share. If Google drops out of China completely, its will be giving up a huge and growing market. If it compromises, it reputation as a corporation fighting against evil will take a big hit. The battle of wills is going to be intense and important to Google’s future. For Larry and Sergey, it is a fight between revenues and principle.

Nevertheless, Google’s momentum will continue to grow, along with all the challenges it faces. Becoming the new Microsoft may not be the description Larry and Sergey would like to have, but it is inevitable. Years ago when Microsoft’s then-CEO Bill Gates was asked if new developments in technology could make his company obsolete, he scoffed, asserting (with an amazing lack of insight to the rising danger of the Internet) that as long as there are computers in the world, Microsoft’s opportunities are strong. Now Larry and Sergey could make a similar claim: As long as the Internet is a powerful force in computing, Google’s prospects--and the controversies it faces--are nearly limitless.

 

Google violates Kansas copyrights

Once again, Google has shown its blatant disregard for international copyright standards.

Earlier today, Google CEO Eric "Oh aren't I smart with my Ph.D©" Schmidt announced that the Mountain View, California company was changing its name to Topeka. 

Why? Because the city of Topeka, Kansas had supposedly given up the rights to that name when it announced it was changing its name to Google.

This argument doesn't wash any better than my uncle Ernie after a night drinking with the hoboes in U.N Plaza in San Francisco.©  

Google, sorry, Topeka, knew that the people of Topeka, sorry, Google, were only planning on making the change temporary.

The Topekans, sorry, Googlans, simply wanted to call attention to the fact that children in that city of 122,000 have never had the luxury of Web-surfing faster than 122K baud, 1,000 times slower than that enjoyed by children in more developed parts of the world like Singapore. The good people of Topeka, sorry, Google, Kansas want to convince Google, sorry, Topeka, to install a Singapore-speed© broadband network in its fair city. 

Google, sorry, Topeka, has promised to do that for any U.S. city willing to change its name to Google, sorry, Topeka, wait, I'm confused now. So that city-that-must-not-be-renamed in Kansas obliged, but only for a month.

I know that Google knew this change was temporary because, in another blatant copyright violation in its attempt to destroy mainstream media, Google CEO Eric "Oh, aren't I smart with my Ph.D" Schmidt's announcement actually linked to a CNN article that described Topeka's, sorry, Google's sad attempt to gain Schmidt's attention so that the children of Kansas might catch up to the technology of the "Singapore Age"©. In that article, mayor Bill "No, I don't have a PH.D."© Bunten said it was only for a month.

CNN, of course, is owned by Rupert Murdoch©, who has complained about Google, sorry, oh to hell with it, Google stealing his intellectual property by linking to his news articles. Dr. so-smart Schmidt is just trying to goad Murdoch© into doing something stupid, like blocking his news articles from Google searches. 

When is Google going to learn that EVERY WORD any American ever writes down or steals from a native American tribe is automatically copyrighted and nobody else has ANY rights to it? Just because Topeka is temporarily relinquishing the name, Schmidt cannot violate the city's copyright©. The city has exclusive rights to that name for 123 years past the death of the city's last living resident.

Please, write to your Congressman and ask the Justice Department to crack down on Google before it becomes any more powerful. Before long, it will have a monopoly on every city name in America©.

Let's face it, if this doesn't prove that Google is evil, nothing will. ©

Google to announce Monday that it's leaving China April 10?

That's the plan, according to China Business News.

Here's part of the the computer-translated version of the Chinese story:

Google in April and China, said "goodbye"?

"We have received news that Google will be April 10 departure to China, but the news now Google has been no confirmation." Yesterday, a Google China authorized agent of "First Financial Daily" said that it was 4 inquire about Google's final decision on the Chinese market, but did not receive any real argument. If Google really had to leave China, and certainly with the aftermath, including the right agent to compensate.

Love those translation programs. More fun to read when you have t decipher as well.

If you want a more coherent version, try an article in Computer World. which picked up on the Chinese story.

The source is an "unidentified sales associate who works with the company."

Interesting if true. But Google doesn't really have any choice. Its reputation is more important than incremental revenues from China. Most companies (can I get a Bing! here?) wouldn't think so, but Sergey would.

When Google said it would end its self-censorship in China or leave, it backed itself into a corner with only two ways out. One it to stay and try to save face with some supposed concessions from China, which is as likely to compromise as a pit bull with its jaws locked on your foot. That out gives people reason to say "See? I told you Google was as evil and greedy as anyone else!" 

The other, to actually leave China, silences the critics and boosts Google's reputation. It will give up a very lucrative marketplace in order to stick to its principles.

I'm impressed if this happens. Steve Ballmer will be too. He's a shark that smells chum in Google-less Chinese waters.

Long term, I think Google's reputation is more important. Trust is critical when you have a company with such an intimate relationship with your Internet habits.

Google has a lot of other new revenue sources to pursue. And it can keep trying to infiltrate China from outside, although that's nearly impossible right now. I wonder if China can block mobile phone access to Google search?

Probably.

Richard Brandt vs. Ken Auletta

Book Review: Inside Larry & Sergey’s Brain

By Ravi Nagarajan
Published on February 7, 2010 at 12:18 am

Mr. Brandt’s book is not as well known as  Googled:  The End of the World as We Know It which we reviewed in November.  However, one can argue that Mr. Brandt succeeds in providing a more vivid background of both founders and he also makes a better effort to draw links between their core values and a number of decisions that were made which may appear “crazy” at first but actually led to Google’s stunning success.  It is easy to see in retrospect how conventional thinking could have destroyed Google’s ambitions at several points during the  early years.  The fact that Mr. Brin and Mr. Page stuck to their core values made all the difference.

Read full review @ http://www.rationalwalk.com/?p=4881

Deconstructing the 'Operation Aurora' attack on Google in China

Brian Prince at eWeek.com has a slide show analyzing the anatomy the back door in Internet Explorer 6 that allowed the attack on services in China. He has some interesting facts:

* Microsoft apparently has known about the vulnerability since September. (Bad PR for Microsoft to wait until Google pointed it out before letting on about it.)

* A "memory corruption" in IE6 allows attacker to remotely execute code.

* The malware used in the attack is a Trojan Horse called Hydraq. It has also been used against some Adobe Systems products.

* Social Networks like Facebook can be used to trick people into giving up info that helps the attackers.

* Evidence that the attack originated in China is "relatively scant."

This whole episode shows that you shouldn't use old versions like IE6. IE8 is now the current version. Were people at Google using IE6, or was it just people using Google products that stuck with the old browser? Personally, I use Chrome.

Bill Gates vs. Sergey Brin: Succumb to Chinese censorship?

    We don't yet know whether Google will remain in China. Google's top attorney, David Drummond, says the company is negotiating with the Chinese government to ease some controls it maintains on the Internet and may have a decision within weeks.    

    I doubt if much will come of it. There can be no significant progress with China on the censorship issue. China is run by an isolated dictatorship, and the country has never had western-style freedoms. The Chinese Communist Party sees nothing wrong with controlling information and restricting free speech.

    In fact, David Bandurski, an analyst with the China Media project, tells the New York Times that control of information has become even more important to the Chinese government recently. (Yeah, I'd say that's probably since the Olympics, now that it doesn't have to worry so much about world opinion. Remind me again how holding the Olympics there was supposed to make China more open?)

    The Chinese censors are so entrenched they're laughable to outsiders like us. The NYTimes says that the Global Times, backed by the Chinese Communist Party, wrote an article about how the whole Google issue was initiated by the U.S. government as a joint campaign to take over the world:

“As the global landscape is undergoing profound irreversible shifts, the calculated free-Internet scheme is just one step of a U.S. tactic to preserve its hegemonic domination,” Yan Xuetong, who heads the Institute of International Studies at Beijing’s Tsinghua University, said in the article.

(Unfortunately, you can't find that article on the Chinese publication's web site. The most recent article on that site mentioning Yan Xuetong that I can find through a Google search is one dated August 10, 2009: (Global Times - Think tank scholar has more fresh ideas than old shoes).)

And I didn't even know that old shoes had fresh ideas. 

    That puts Google into a Chinese Pickle. If it remains in China now, it will take a big PR hit. If it does back out, Microsoft gets the PR hit because Bill Gates and Steve Ballmer have been shrugging their shoulders and asking What's So Bad About Censorship? Bill's latest comment to the NYTimes: If Google pulls out of China, "What point are they making?"

    So Google will not be able to claim it has made any progress with the Chinese government in the next few weeks. Sergey Brin has never been comfortable going along with the regime and would certainly like to abandon ship there. But if Google does leave China behind, it loses all chance of trying to improve the flow of information within China. That's a task that has but a sliver of a chance of success in the next decade or two anyway, but who knows what will happen in the next few decades?  

    But here's the real problem. Google--and all major online services--are voluntary censors. The Chinese must find it strange that Google can't publish books in the U.S. and Europe that are out of print because of copyright laws. In Germany, Google must censor neo-Nazi sites from its search engine (and who complains about that?) 

    In fact, some people complain when Google doesn't censor offensive stuff. A couple of years ago, management refused to block the search engine from pointing people to an anti-Semitic site called JewWatch. Bloggers angrily decried that decision as essentially condoning evil. Sergey (who is Jewish) publicly defended the company's position as an anti-censorship stance. And, of course, all the publicity increased traffic to the offensive site.

    But sometimes, Sergey feels the company has no choice but to remove material. Several years ago, for example, the Church of Scientology made a copyright claim against an anti-Scientology site that had excerpted text from the Church's writings. Sergey saw it as a free speech issue but had to back down because the anti-Scientology site did, removing the material rather than fighting.

    So who is right? What's the right thing to do? Unfortunately this is close to a no-win game for Google. The best it can do is make the issue a loser for Microsoft. 

    Unless Sergey can pull a fresh idea out of his shoe.

Google, Obama Administration team up against Chinese censorship. Go Hillary!

Why is Secretary of State Hillary Rodham Clinton following up on Google's report of a cyber-attack from China and its threat to withdraw from Chinese soil with her own remarks condemning the country's policies?

Makes you wonder what conversations may have gone on behind closed doors between President Barack Obama and one of his science/technology advisors, Google CEO Eric Schmidt.

Secretary Clinton has called for the Chinese government to conduct a "transparent" probe into who was behind the attacks. (WSJ summary) Yeah, good luck with that.

For good measure, she threw in the names of other countries that love to censor too much, including Tunisia, Uzbekistan, Egypt, Iran, Saudi Arabia and Vietnam. Sounds like a list Google could have provided, as it has done in certain books. 

Can there be any doubt that everybody thinks or knows the attack was perpetrated by the Chinese government? I mean, come on, if the search for dissidents doesn't show it, Secretary Clinton's involvement has to. Chinese officials think so, and are pissed. (Another WSJ article)

"We urge the U.S. side to respect the facts, and to stop using the so-called Internet freedom issue to make groundless charges against China," Ma Zhaoxu, spokesman for the Ministry of Foreign Affairs, said Friday in a statement on the ministry's Web site. 

Secretary Clinton sent a message to the Chinese that businesses are hampered without a free flow of information.

"Increasingly, U.S. companies are making the issue of information freedom a greater consideration in their business decisions," she said.

Sounds like a message to China, like President Obama's earlier statements in support of Google, that the U.S. government approves of the threat to withdraw.

Perhaps this is a way for the U.S. government to encourage other U.S. companies to also put pressure on China to change its ways. 

I don't think Microsoft will, though. Steve Ballmer displayed a bad case of foot-in-mouth disease by discounting this whole issue.

.

NOTE: I'm collecting updates on this story at my site, RichardLBrandt.com

Microsoft creates a patch to block Google's Chinese 'Aurora' attackers

Of course, Microsoft doesn't call it Aurora. It's the "Google Attack."

Microsoft says it was an old version of Internet Explorer (IE 6) that was vulnerable, anyway.

The patch is due tomorrow (Thursday Jan 20, 2010, in case you're reading this next year when there's another Microsoft security problem.) According to Microsoft senior security program manager Jerry Bryant, the patch

 "addresses the vulnerability related to recent attacks against Google and a small subset of corporations. Once applied, customers are protected against the known attacks that have been widely publicized."

Yeah. Why so much publicity over an attack that may have been perpetrated by an oppressive government against civil rights advocates and a small subset of 20 to 34 corporations doing business in China? 

.

Note: I'm keeping track of this issue at my Website, RichardLBrandt.com

Open letter to Steve Ballmer: Leave China if Google does

Dear Steve,

    I've known you for a long time. Long and closely enough to know that you're not so much the killer bulldog your reputation. makes you out to be. You're actually a smart, thoughtful, interesting and likable guy in person, albeit a ruthless negotiator and hard-hitting executive who plays the game of business like war.

    But, man, you really blew it when you responded to questions about whether Microsoft might back out of China, as Google is considering doing in light of the cyber attacks from there. You have been quoted as saying,

"We're attacked every day from all parts of the world, and I think everybody else is too. We didn't see anything out of the ordinary."

    Whoa. Nothing out of the ordinary? How about the following? 

• According to Google's announcement of the attack, "it soon became clear that what at first appeared to be solely a security incident--albeit a significant one--was something quite different."
• Google won't say it publicly, but others have expressed strong belief that this attack came from the Chinese government.
  
• Google also notes that "a primary goal of the attackers was accessing the Gmail accounts of Chinese human rights activists." That includes a young woman at Stanford who has been publicly critical of China's stance toward Tibet. That lends credence to the government attack theory.
• So does the sophistication of the attack. The New York Times notes that "people familiar with the investigation" -- which is often a euphemism the press uses to mean the company itself (Google) -- say the attacks were aimed at source code repositories. 
• McAfee says the attack exploited an Internet Explorer flaw, a fact that will not be lost on people reading your "what's the big deal?" statement. 
• McAfee also says the malware allows the "attacker to perform reconnaissance and gain complete control over the compromised system." This ain't your teenage kid's usual hack. 

I don't know if leaving China is a good idea or not. But Google has gotten enormous criticism for years just for being in the market -- criticism that has skipped right past Microsoft because Google has been a better target.

Suddenly, Microsoft -- and you -- looks like the evil empire again.

Here's what the vast majority of people think: Microsoft is partly culpable because of the IE hole, is turning a deaf ear to the speculation that this could be a government attack, and wants to exploit any withdrawal by Google to gain market share and revenues in China, to hell with any ethical stance.

It's certainly what I think. And that's not good for the long-term future of Bing.

I'm maintaining updates on this story at my site, RichardLBrandt.com:

McAfee: Chinese cyber-attack Aurora is Microsoft's fault. Sort of.

China: Foreigners please come do business here. Our Internet is "open"

White House: Hooray for Google! Microsoft: We weren't attacked

Google stock down, Baidu up

What do/don't we know about what happened?

McAfee: "Aurora" attack on Google was due to a Microsoft IE hole

In a blog post, McAfee CTO George Kurtz names the attack "Aurora." He says the attackers exploited a previously unknown vulnerability in Internet Explorer."We informed Microsoft about this vulnerability and Microsoft is expected to publish an advisory on the matter soon.: Attackers chose a few people within an organization to attack (he suspects they chose people with access to intellectual property). The attack looks like a trusted source wants you to click on a link (that old scam?) which then opens a back door that allows attackers to "gain complete control over the compromised system. The attacker can now identify high value targets and start to siphon off valuable data from the company."

UPDATE ON AURORA 1/15/2010 9:30AM

Taylor Buley at Forbes has a nice update on Aurora today.

Taylor talked to Ed Skoudis, a cybersecurity researcher with IntelGuardians for some perspective on IE vulnerabilities, something that most experts thought was disappearing as IE aged. Not.

It was surprising to realize that this back door had been sitting there, possibly for years, and yet nobody had found or snuck through it before. The Chinese hackers were either "very clever or very lucky," says Skoudis.

Dmitri Alperovitch at McAfee votes for clever. The code was very sophisticated and written from scratch, not kluged out of some cookie cutter code.

Microsoft admits that the IE back entrance was "one of the vectors" in the attack.

Time to stop patching and start rewriting these old programs from scratch.

I'm keeping track of updates on this story at my site:

McAfee: Chinese cyber-attack Aurora is Microsoft's fault. Sort of.

China: Foreigners please come do business here. Our Internet is "open"

White House: Hooray for Google! Microsoft: We weren't attacked

Google stock down, Baidu up

What do/don't we know about what happened?