If those who do not study history are doomed to repeat it, Google strategists might want to take a good look back at how a dynamic Netscape was choked by a browser-bundling Microsoft in the late 90s, as chairman Bill Gates divulged the company’s Internet search ambitions in Sydney recently.
Gates declared that although Microsoft was in the Internet search business before Google was born, the company is “fairly unique” in that it, like Microsoft, likes to hire lots of computer science PhDs.
“And so the rate of improvement of both us and Google will be highly beneficial to the consumer as we compete,” he said. “It was that way in browsers, it was that way in lots of other things.”
Gates said that the way search is done today is “very low-tech” because a “bunch of words” is indexed.
“You’re not actually understanding the documents and so some of the false hits you get are almost humorous,” Gates said. “A human would not make those mistakes because a human can understand the document.”
According to Gates, Microsoft has been doing linguistic research for more than a decade that allows the understanding of documents to the extent that “you can bring in the idea: don’t show [this seeker] a restaurant if it’s not nearby; don’t show [this seeker] something about potato chips if they mean computer chips”.
“And so personalization [means] understanding local information, being able to parse in to the semantics of the document, being able to browse databases, [and] being able to attach domain knowledge,” he said.
“Say if I want to know if a flight is on time. Generic Web search today is actually terrible for that, but we should be able to look at your query and say, hey, that’s a flight number and give a response that’s basically just a direct answer to the question, not a list of random Web sites.”
It’s this “personalization” that some say will only be possible by using information obtained by Microsoft’s desktop platform, rendering third-party Internet search engines less relevant.
“You want to search the Web, you want to search your corporate network, you want to search your local machine and, in fact, sometimes you want search to work against multiples of those things,” he said. “You want search to work against files, e-mail, [and] you want search to understand the structure of the documents.”
It’s this platform integration that enabled Internet Explorer to sweep the once-mighty Netscape off its feet and the same fate may await a platform-less Google.
Gates said people want that form of search but it's “a bounded context”.
“And so taking all the history of what you've done, what you like, what you're doing, taking these linguistic capabilities and making search about 10 times better than it is today,” he said. “In July the format of the site will change and so the quality of what you get and the way it'll look is dramatically improved. And then, of course, we'll keep investing in it after that.”
Managing director Internet technology consulting firm Web Strategy Resources Tim O'Brien, said Microsoft’s search intentions centre on the lucrative the pay-per-click search engine advertising model and “now wants a slice of the action”.
“It must rankle Microsoft no end that Google's competitor in that arena – Yahoo! through its Overture program – is earning considerable advertising revenue by displaying text advertisements as part of the search results on Microsoft Web sites, including Ninemsn,” O’Brien said. “Microsoft would love to keep that revenue all to itself. Hence, there is no doubt Yahoo! would also be very nervous about Microsoft's intention to enter the search engine market.”
With Windows users having search functionality placed in front of them, O’Brien believes there is a good chance many will abandon Google.
“But only if the Microsoft product consistently delivers more relevant search results than Google,” he said. “Internet users rely on search engines to help them find what they need quickly and efficiently. They will not stand for a search engine that delivers half-baked results. We must remember that after its launch in 1998, it only took Google a matter of months to blow away AltaVista and other well-established search engines. Internet users latched onto Google because it indexed more pages and delivered better, more relevant search results than any other search engine on the market.”
O'Brien said the Microsoft search engine product will have the advantage of being embedded into Windows, which means Google will have to continually improve its searching algorithm and overall indexing capabilities if it wants to remain the search engine of choice for Internet users.
“Fortunately for Google, there is is still a lot of room for improvement with respect to Internet search engines,” he said. “Also, Google has always prided itself on being able to attract the brightest and best computer scientists, which should allow it to continue to innovate. Google's focus should be on the expansion of its portfolio of online applications.”
Frost & Sullivan Australia senior industry analyst Foad Fadaghi said Microsoft is going after Google the same way it went after Netscape, but “search is different to Web browsing as users and advertisers like to use different sites for their different strengths and niches”.
“I think the industry is growing fast and thus there will be room for more competitors,” Fadaghi said. “There is a great opportunity if Microsoft can utilize its partnership with NineMSN in Australia which is the leading Australian portal; however, recent deals with Overture will see this relationship out in the medium-term.”
Fadaghi said Microsoft will be bringing offerings to market before Longhorn and that Google will follow suit with search technology for the desktop and rely on its current market strength and brand in the short-term.
COMMENT: Google not quite as vulnerable as Netscape
Indeed, Microsoft pursued Netscape with incredible vigour. This was well documented during the US Justice Department hearing back in the late 90s when Microsoft's tactics were revealed for the first time.
During my time at OzEmail, Microsoft was enormously energetic in trying to persuade us to make IE, not Netscape, the company's preferred browser. That was back in the mid to late 90s. Microsoft was an irresistible force then for a number of reasons. Throwing your lot in with it made so much more business sense. And even back then we would speculate about whether Netscape really had a business model that was sustainable. Which, of course, it did not.
I had a few ugly phone calls from Microsoft people in Australia in those days when they felt they were not getting everything they wanted. They were hard-nosed and very ambitious for their company. You have to respect that, and Netscape were completely outflanked in a business sense. Really, it never had a chance. When OzEmail launched its own search engine, ANZWERS, I would watch usage like a hawk as it was my product line, and each week you could see users moving from Netscape to IE.
As for search today, well I know everyone loves Google, but I still think search sucks. We like Google only because it is the best we have got.
Not even that is necessarily true, however. I think the idea that Microsoft is going to push hard in this area is great news. The more competitive the marketplace the greater innovation will be.
I say that because there are a few flaws in comparing the Netscape and Google scenarios. A browser sits on your machine, Google is a site hanging out there on the Net. Microsoft cannot stop you going to Google, but I am sure it will do its utmost to promote its own search technology.
Ultimately, in the case of Google, the best technology will win - but I'm not so sure that was the case with Netscape.
Mark Hollands is principal of research company ITR