Article from SFGate.
“Microsoft Corp. and Facebook Inc., the onetime technology king and the claimant to the throne, are forming an increasingly unified front in the battle for industry supremacy against Google Inc.
The software and social-networking giants have announced a series of partnerships in recent months, including the integration of Facebook user data into Microsoft’s Bing search engine results and the use of its Office applications in the Palo Alto company’s planned communications service.
No single initiative announced so far represents a clear game changer, analysts say. But the Redmond, Wash., software company lends some hefty industry support to a Facebook vision of the Internet that’s far different from the one that fostered Google’s rise, some argue.
‘Substantial threat’
“When you add all of these (collaborations) up – and there seem to be more of them every week – then it really is a very substantial threat to Google,” said Ray Valdes, an analyst with Gartner Inc.
He and others believe that cues in social networks, like a friend’s links and “likes,” are becoming increasingly important guides to the Internet experience, which could over time undermine the importance of the online searches that Google has long dominated. If so, it might become increasingly difficult for Google to sustain the growth in its core business and it could give Bing a powerful advantage, because its search results now incorporate friends’ preferences.
But, of course, those are all big ifs, mights and coulds.
For one, it assumes that Google won’t develop its own social capabilities – an effort it’s known to be pouring resources into after several whiffs – or strike a similar deal with Facebook. It’s unclear whether Google would want a partnership that would grant its competitor so much credence, or whether the Bing relationship is an exclusive one. Microsoft referred the question to Facebook, which didn’t respond to an inquiry from The Chronicle.
It’s also notable that even with the spectacular rise of Facebook, marked by a six-year sprint to more than 500 million users, Google’s advertising revenue from keyword searches continues to swell. Meanwhile, the Mountain View search behemoth is demonstrating an ability to generate money outside its core business, saying during a third-quarter conference call that display advertising and mobile revenue reached $2.5 billion and $1 billion, respectively, on an annualized basis.
“As the Web evolves – from mobile to video to display ads to cloud computing – our business grows with it, and the results speak for themselves,” a Google spokesman said.
Different philosophy
Google has stressed that its philosophical approach to technology differs fundamentally from those of key competitors, dubbing theirs an open system that allows users to control their information and other companies to adapt the software as they see fit. By extension, it has suggested or stated that companies like Facebook, Microsoft and Apple Inc. generally operate closed systems that tightly control user data and experiences.
“I worry … that the business structures are causing (companies) to keep too much private information,” Google Chief Executive Eric Schmidt said during an interview at the Web 2.0 Summit in San Francisco this week. “We’ve taken the position that user data is the user’s, and it should be possible for them to move it back and forth.”
Open, closed systems
There’s ample debate, however, over the appropriate definitions of open and closed systems, and whether Google sometimes acts like the latter when it fits its interests. Moreover, as Apple CEO Steve Jobs said last month, when discussing the highly popular and tightly integrated iPhone, closed systems sometimes win.
“The link between (Facebook and Microsoft), especially across applications and communications, can be a very powerful partnership,” said Tim Bajarin, president of Creative Strategies Inc. in Campbell.”
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