Can BingHoo really take on Google?

Microsoft and Yahoo announced a strategic alliance which will see Microsoft power Yahoo's search engine using algorithms from its Bing search engine while Yahoo will oversee the management of Microsoft's advertising space.

This may be good news to businesses and organisations that buy ad space with search engines. Microsoft and Yahoo have very little share of the online search market individually, but together, they might have a share which may make it worthwhile for marketers to buy ad space from Microsoft-Yahoo.

Steve Ballmer said that this partnership would give users a real choice in a market dominated by one company. In other words, he hopes this deal will allow Microsoft and Yahoo to challenge or perhaps even end Google's dominance in the online search market. That's really weird coming from the head of a company that has enjoyed unrivalled dominance in the operating systems market. Not only that, it also has a big slice of the web browser market with its Internet Explorer and also the office applications market with its Office Suite. So, he shouldn't be complaining about users not having a choice since anybody who buys apc has a copy of Windows thrust upon them since it is pre-installed. Only those with enough technical know-how really have a choice since they are able to install a Linux distro.

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Maybe he is complaining because Microsoft hasn't got the bigger slice of the online search market. And if its offering choice that Steve Ballmer is after, I think the users already have a choice and make a conscious decision to use Google and since price has nothing to do with it, as they all are free to use, it all comes down to quality and brand awareness of each product. In a way, by Microsoft partnering with Yahoo, it is perhaps reducing user's choice since Yahoo Search will now be a repackaged version of Bing which is really Windows Live Search with some make up on.

So, once Bing starts powering Yahoo's search results, how will it exactly challenge Google's dominance? Will users suddenly start using Bing and ditch Google? That's the same as asking if a large number of users will suddenly start ditching Microsoft's Windows in favour of Google's Chrome OS.

I think that the problem is more to do with the image of each brand. Google is synonymous with online searches. So much so that the act of searching something online is commonly referred to as “googling”. In the same manner, Microsoft's Windows is almost considered to be an integral part of the computer. So much so that many users that buy netbooks that come pre-installed with Linux OS prefer to do a clean install of Windows XP.

So, if Microsoft and Yahoo really want to take on Google in the search engine market, they should perhaps focus on a marketing campaign to inform, remind and reiterate to the users what their brand stands for. Something along the lines of Microsoft's “I'm a PC” campaign which was meant to be an answer to Apple's “Mac and PC” ad campaign.

Overall, I think this partnership will not be that beneficial to Yahoo in the long term, it will only be beneficial in the short term as a survival strategy. For Microsoft however, this could be a chance to diversify and depend less on its traditional business model of charging users to use their software and start focusing on providing applications online and generating revenue by displaying advertisements. This is even more important since Google is slowly encroaching into Microsoft's territory by offering free, albeit with less functionality, alternatives to Microsoft's Office applications and have recently announced the launch of their own operating system, Chrome OS.

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RIP FSA?

George Osborne, the shadow chancellor, said that the Conservatives planned to get rid of the Financial Services Authority if they were to win the next general election. Under their plan, the FSA would be renamed to the Consumer Protection Agency and would be responsible for consumer issues while the Bank of England would have overall power and would also be responsible for monitoring and regulating the banking sector. This move would abolish the tripartitie system consisting of the FSA, the Bank of England and the Treasury which was set up in 1997 by the then chancellor and now Prime Minister, Gordon Brown.

Leaving the pros and cons of such a policy on one side, I don't think it's right to announce definite plans of what would happen to the FSA if the Tories were to win power. That is because it diminishes FSA's authority now when it is trying to regulate the banking sector as nobody will then take them seriously because everybody knows that the FSA's days are numbered.

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Think of a CEO that announces that he is to step down after a year and names his successor. Who do you think will hold the real power now, the CEO or the person who will succeed him? A leader with a sword over his head doesn't have any significant power as everybody in the organisation will listen to the new guy who will eventually be in power.

Rather than really bring about a change in the banking regulation, it seems that by announcing their plans, the Tories are trying to earn some political brownie points by taking advantage of Gordon Brown's unpopularity.

Even though it may be obvious from the numerous polls and the general sentiment amongst the public that the Conservatives are going to win the next election, it does not mean that they have won the election and are in power. The mainstream media are increasingly interpreting the phrase “if the Tories win the next general election” as “when the Tories win the election”.

The thing is, whether we like it or not, Gordon Brown is still the Prime Minister and the problems plaguing the financial sector have to be dealt with now, by those who are in power now. By announcing that the FSA is doomed and the media hanging on to George Osborne's every word, it affects the authority that the people in power have when they try to be though with those running the financial institutions.

So when you read the headline “FSA warns banks over long-term bonuses” in the Financial Times, you don't picture a strict headteacher warning a student, but instead picture a lion without any claws or teeth in a zoo letting out an inaudible whimper rather than a ferocious roar. If the regulators and policy makers have no authority, how is the change to be brought about. It's no wonder then that some of the financial institutions, which not less than a year back, were on the brink of collapse and some even went to the government cap-in-hand asking for financial help are now announcing record profits and are still trying to pay bonuses even when the so called “bonus culture” has been criticized by the regulators, the prime minister and the chancellor for hastening the speed of the financial mess.

Sure, its necessary for the public to know the policies of each party to enable them to make an informed decision about whom they will cast their vote. But for a political party that is desperately trying to distance itself from the negative publicity from the MPs expenses scandal and hoping to win the next general election, it doesn't seem right when it tries to capitalise from its opponent's unpopularity and kicking him while he is down.

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Google's new operating system

Google announced on its blog that it is going to launch its own operating system next year based around its web browser, the Google Chrome. The Google Chrome OS will initially be targeted at the netbook market. It will be open source and based on the Linux kernel. Since it’s a Google product, it’s going to be free as well. The blog claims that the new OS will be light weight and more focused on getting the user onto the internet within seconds of booting up rather than waiting minutes for the computer to load.

This step is perhaps the next best logical step for Google since the online world is its home ground. Right now, it depends on other providers providing the user with a platform-the OS and the browser-to get onto the internet and access its services. It solved part of the problem last year by launching its own web browser with the hope that it would come together with all its online applications to provide an integrated experience to the user.

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So, an operating system that is oriented for the internet would be ideal for a netbook since such devices with low processing power are likely to be used for things like accessing the internet. However, totally depending on the internet to provide all the functionality assumes that the netbook would be constantly connected to the internet. The most popular method of accessing the internet through a netbook is by using a dongle that connects to the internet via the mobile 3G network. Although such dongles can be obtained cheaply through deals, which include the dongle and the netbook, such deals have incredibly small download allowances. Since there would be a lot of exchange of data with the internet, the download limit would be quickly reached. So, Google should not only work with manufacturers to get its OS onto their devices, but also with the telecommunications companies and explore new ways of providing cheap internet access with huge download caps where the cost is subsidised by advertising-Google’s main business.

The news media are referring to Google’s announcement as “Google taking on Microsoft”. I think that’s a bit premature to think that Google’s new OS,which depends on cloud computing, will offer all the functionality and applications that Microsoft’s operating system, which largely depends on software hosted locally, can provide the user. Especially since all we have from Google is an announcement, and not an actual product that can be tested, compared and bench marked.

That is not to say that Microsoft shouldn’t be worried about Google’s OS. That’s because currently, users that want Windows on their netbooks are offered Win XP and not Vista. The other alternative is a Linux based OS. Most users prefer XP although its expensive and old because they are familiar with the user interface and have apprehensions about switching to an unfamiliar system. That is why Linux distributions, most which are free and some of which already offer a light weight OS some as small as 50Mb, do not have many users since they are seen as being complicated and “techie”. But with a popular name like Google attached to it, it wouldn’t take long for these apprehensions to go away and for users to start switching to Chrome OS.

It would be interesting to see how Google goes on to monetize its operating system. Microsoft of course gets its revenue by charging a huge price to those who wish to use its operating system and so does Apple to those who wish to use its OSX, although its not so pricey. Linux distributions depend on a community of developers and some organisations get their revenue by providing support to businesses that use Linux operating systems and also by providing customised solutions. Google will obviously fall back on its core competency-its advertising business. That’s how it currently generates most of its revenue, by advertising to those that use its products.

Like in most cases, at the end of the day, it all depends on how Google execute their plan. If they become complacent and start thinking that anything that has the Google brand attached to it will become popular, their OS may not turn out to be a Windows killer. It will be interesting to see what the end product looks like when the beta version is released later this year.

And if any of its previous products are to go by, expect the Google Chrome OS to be in beta till the year 2020.

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