Summary

There is a fight going on. Google has been successfully attacking the core of Microsoft applications (Office, OS via Linux), while Microsoft ineptly tries to attack Google (and Yahoo) on the Net. Msft has lost its way. (and on a side note, Yahoo isn't doing to well against Google either)

To succeed would require both reducing revenue gain at Goog (and share price increases) while dissolving the ecosystem around these revenue centers. Slash and burn - Google depends on advertising. With IE, disintermediate google. There is no reason a 'browser' cannot just return results without ads. An editorialized (meta) search engine should do the trick. A: return more relevant results (including those from google) and B: eliminate the ads (and hence the revenue). Afterall, msft doesn't need the $$$ from their search business.

To avoid appeareances of monopolization, a 'vassal' company could do that instead of Microsoft. Doesn't mean msft cannot encourage nor invest in such such companies though....

In progress thoughts.

Google
1. Market cap allows purchasing power
2. Talent pool + stock velocity allows attracting more talent
3. Adwords focused revenue (weak point)

Microsoft
1. Market cap allows purchasing power
2. Talent pool + stock non-velocity detracts talent (weak point)
3. Software sales focused revenue (weak point)



MAIN AREAS : FAST FOLLOWER, ECOSYSTEM FOCUS, SLASHBURN, NEWPROD

* It is already to late to completely demolish google. Containment should be the goal.



* Google survives in attracting talent as once msft once did through prospects of riches and excitement. This must be equalized at both ends by reducing the goog potential of rising stock prices (and indeed dropping it) while increasing the excitement level at msft as well as elsewhere.

* A fast follower (FF) group should be created at msft matching google move for move. It doesn't (and shouldn't) matter
what happens to the actual products success rate but this would bring some level of internal cohesion at msft as well
blunting any google move. As it stands any thing that msft doesn't do only accretes developers to goog.

* There is a bubble growing in the web space. This should be 'encouraged' to sap talent out of google. The WA msft 
location should insulate somewhat and this is more of it'll hurt them more than it'll hurt us. ( ex. every once in a while
announce and sometimes purchase small startup companies. Put founders/engineers into 2-3 yr contracts working at the FF group, etc. Let the VC ecosystem go nuts and amplify the $$$. )

* Google gears is out and something like this should be STRONGLY SUPPORTED. 
This can eventually lead to the removal of google's main search advertising stream. 
At the very least, it would force a more equitable sharing of the revenue pie as the main portion
would not come through 'search' anymore. Unfortunately, this will also lay the foundation for a 'browser-as-os' capability

* Gears does pose a pretty vexing problem for MSFT. With Gears, Word/Access/Excel/Outlook ie. all of Office can be copied 
while still providing an almost local app like experience. With a price tag of close to 0, there is no reason why it 
wouldn't supplant the general market of -education + government- afterall, the 'extra' features that come with Office,
Powerpoint.... (of which a replacement is somewhat available) isn't always needed now.. isn't it?

* To survive, msft will have to pursue the newer models. Or somehow fight back against gears..
-- Pursuing the newer models option would take you towards a 37signals method of providing small apps while
charging small amounts on a monthly basis. It shouldn't be too hard for msft to transform to the subs model as 
it has already being tried. 

-- Figthing can mean either sabotaging the capability (low prob of success) or embracing and attacking.
As before, the overall goal is to demolish / contain the google'ness. ie. the problem isn't google per se
but the fact that they have created an environment that promotes the uncontrolled growth of a universe outside
of msft that now threatens the very core.

* A subscription capability should be provided to all and one to enable 'normal' dev's to capitalize on capturing 
users. ala Google Checkout/Paypal. -ECOSYSTEM MOVE-

* Since search is such a small part of msft, it should be sacrificed and revenues out of that should be provided
to partners (all and sundry) ala Google Custom Search Engine - at the minimum.


* The strength in the desktop is that COMPUTE POWER is avl and abundant. Compute heavy AND algo heavy functions should 
be further explored and implemented. Afterall, as good as Open Sourcing works, heavy duty research is generally
out of their hands with obtuse items coming from academia (which should be monitored & corralled). For 
instance, Riya should be something msft integrates within the system..(or something simpler like face based login (not that
it is 'secure' but who cares in the home environment)),
as should natural language input, or visual heavy capabilities (not eye candy but something more like - a visual based search of the neighbourhood, say for rentors/home purchasors which allow sightlines to be checked from virtual windows or the street as can be seen from a virtual door).