Google and Microsoft: Core Competencies

March 20, 2009

One of my readers sent me a couple of links to remarks by Steve Ballmer, Microsoft’s top gun, this morning. The news story contained one revealing observation here attributed to Mr. Ballmer:

I’ll tell you the search business has been harder for me and for other senior people to learn than most businesses…

Interesting because Microsoft has invested in search and watched as its market share in Web search has declined. The company has not fared well in the enterprise arena either. The $1.2 billion investment in Fast Search & Transfer has yielded since April 2008 when the deal concluded:

  • One Norwegian police action
  • A Web part
  • A roadmap.

But Google’s executive quoted in Mediaweek’s “YouTube Exec: Google Not Good at Content” here reveals a similar incompetency. Kevin Yen, director of strategic partnerships at Google allegedly said:

We’re not good at content… We create platforms that allow other people to succeed.

After investing in multiple content-related businesses, creating a legal stewpot with copyright hawk Viacom, and launching Knol (yep, I know. What’s a Knol?)–Google admits that it is not too good in content.

Step back.

What do these quotes reveal about two of the most influential companies in software, electronic information, and systems?

My thoughts:

  1. Competence in one area does not transfer competence to another area
  2. Believing one is able to solve every problem does not mean that one can actually solve those problems
  3. Technology does not equip Google and Microsoft with magic wands.

Just my opinion about two influential companies with reservoirs of confidence in their abilities to climb every mountain.

Stephen Arnold, March 20, 2009


5 Responses to “Google and Microsoft: Core Competencies”

  1. Michael Grove on March 20th, 2009 6:38 pm

    What is interesting about Microsoft and search and Google and content is in both cases their customers have real choice and in both cases neither company is chosen. How well do these giant know their customer and are they willing to move heaven and earth to serve them? MG

  2. Jean Ferré on March 21st, 2009 8:30 am

    Maybee the customers don’t like to buy everything from the same firm? maybee they are a different person hen it comes to search and when it comes to produce content? To say it differently, it is the market who does not want a single company to provide all services. Maybee the market “finds” it more efficient if search and content are not in the same hand? JF

  3. Stephen E. Arnold on March 21st, 2009 10:57 am

    Michael Grove,

    My view is that neither Google nor Microsoft know their customers. Google depends on data, not humans., Microsoft depends on constituencies, not individual users. As a result, both companies operate in a cloud of unknowing and are becoming increasingly similar in management methods.

    Stephen Arnold, March 21, 2009

  4. Shepherd Smith on March 23rd, 2009 8:29 am

    In Microsoft’s case, it’s been my impression that they didn’t acquire FAST b/c they were interested in selling an Enterprise Search tool as such, but rather that they wanted to incorporate FAST search functionality into SharePoint.

    Example: MSFT terminated the annual FAST conference (such as the one that recently took place in Las Vegas) and announced that, going forward, FAST will be a sub-topic at their SharePoint conference.

  5. Sam on April 2nd, 2009 8:44 am

    Core competency itself means transferable to all other SBUs of a firm. If not it is only competitive advantage…

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