The fight between Microsoft and Google is over who’ll be seen as the world’s most important tech company.

And not more than a month and a half ago, Microsoft unveiled its new search engine Bing, which it hopes will steal market share from Google and finally make it real money online.

From the news of it, it’s a full-blown tech battle, complete with behind-the-scenes machinations to sic government regulators on each other.

It is, however, not a death match — it’s more of an fight to see who will be the King of Technology, since both companies pull in their billions through completely different siphons and are unlikely to severely wound one another any time soon.

Google pulled in $22 billion in revenue in 2008, 97 percent of which came tiny text ads bought by the keyword and placed next to search results or on pages around the web. Google makes a negligible amount of money bundling its online apps for businesses, charging $50 a head annually — but mostly it just gives its online text editor, email and spreadsheet programs away.

By contrast, Microsoft sold $14.3 billion worth of Microsoft Word and PowerPoint and other business applications over the last nine months, making a profit of $9.3 billion. It made a further $16 billion in revenue in 2008 through sales of its operating systems, which range from XP installations on netbooks, to Vista, to Windows Mobile to its server software.

Google now plans its own range of operating systems, starting with Android, an open-source OS for small devices like smartphones, and Chrome OS, a browser-focused, open-source OS that will run on notebooks and desktops.

Clearly top executives at each company look over at the others’ pots of gold and dream of ways to steal them, or at least make it harder for the other guy to make money.

In fact, they even dislike each other enough to spend money to make the other one lose revenue — take for example, Microsoft’s behind-the-scenes campaign to scuttle last year’s proposed Google-Yahoo advertising deal or its ongoing attempts to derail the Google Book Search settlement.

But in reality, the competition is really about creating universes or ecosystems that it hopes consumers will want to live their technology lives inside. And it’s about ego — a fight to be recognized as the world’s most important technology company.

Microsoft would love for everyone in the world to be using its Internet Explorer browser to search through Bing to find a story from its MSN portal to email via Hotmail or Outlook to a friend. Add in a smartphone running Windows Mobile and an Xbox in the living room for the kids, and you have a Microsoft family. And though it is much joked about, Microsoft is the dominant platform for software developers of all types, whether they are making small business software, massive online role-playing games or photo-editing utilities.

Google’s ecosystem looks different. It starts with a Google Chrome browser (oddly running only on Windows) with a default homepage set to Google News or a customized Google homepage. From there you might go to Gmail and then click on a Word document sent to you as an attachment which Google will quickly — and safely — open for you in its online word processor.

But most importantly, Google wants you to search and travel around the web, hitting web pages that run Google-served ads and Google tracking cookies. You might think that Google is a really cool company to give away all this free technology, while never thinking about the persistent and silent data collection Google is undertaking to profile you in order to deliver you to advertisers for a premium.

So how do the two stack up in four key areas of competition?

Browsers: Internet Explorer in all its variations still retains close to 70 percent of the market (depending on who is counting and how). That dominance remains, even though Microsoft’s latest offering IE8 lags behind all the other major browsers in features and advanced web capabilities.

Firefox, Opera, and Apple’s Safari have all driven browser innovation over the last five years, but most people have not been convinced to leave IE behind, despite other alternatives being safer and more advanced. Why does it matter? Well, IE installations come with a default home page, don’t they?

Google’s Chrome browser, on the other hand, is a handsome, whiz-kid of a browser. It’s sleek and nimble, and it revolutionizes how tabs are handled. The address bar is the search box (Google as default, naturally). Each website opened runs as its own browser instance and has very low permissions to read and write to files. The sandboxing of tabs means that if a single website hangs or crashes, the rest are unaffected. Meanwhile, lower permissions make it harder for a hacker to bust into your computer through your browser.

Chrome also has less than 2 percent of the browser market share.

Online Search: Google’s name now means search to most users. Google’s search engine means money to Google. In June, it delivered 78.5 percent of search results pages delivered to U.S. web users. In the first three months of 2009, Google pulled in $5.2 billion in revenue, a majority of which came from AdWords, an auction-based service that triggers ads based on the keywords in a search query.

Microsoft recently debuted Bing, a new search engine it hoped would fare well in comparison to Google. It’s got some fine innovations, and shows the company is thinking very hard about better ways to present information to users by finding ways to synthesize data, rather than just retrieving links. Still, despite these improvements, a $100 million ad campaign, and generous press coverage that treats Bing like an underdog, Bing gained only a point in June to get Microsoft 8.2 percent of all searches.

Operating Systems: Microsoft has been making operating systems since 1979 and has spent 28 years perfecting MS-DOS and Windows NT, the frameworks that Windows have been built around. Microsoft is estimated to run on about 90 percent of all laptops and desktops in the world. By copying its competitors’ best features, leveraging questionable licensing arrangements and using its base of accustomed users to buy it time against innovators, Microsoft has held on to its lead in the OS market for almost 30 years. That’s despite challenges from Digital Research, Apple and IBM.

Microsoft’s newest version, Windows 7, will be available in the fall. Early reviews say the OS boots quickly and sleeps fast, and avoids much of the confusing interface decisions that have made many dislike Vista, the successor to Windows XP. Microsoft also dominates in the business world, where nearly every medium to large company standardizes around Microsoft Office. Microsoft is also at work on version 6 of its operating system for handheld devices, which it first launched in 2000.

Its OS advantages are immense. It has millions of users who know nothing else and who like Windows. There are millions who are attached to games or the thousands of desktop apps that are only available on Windows. Thousands of devices just plug in and work on its hardware. And familiarity with Microsoft software is a requirement for a huge number of office jobs.

By contrast, Google first stepped into the OS game in 2007 when it announced its Android operating system for small devices. Google estimates that some 18 phone models will be running its system by the end of the year. Last week, Google announced, but did not show off, a new OS to compete with Windows, dubbing it Chrome OS.

That name signifies that Google’s OS will be for the web and browser-based. It hopes to convince developers to write software that runs inside a browser, instead of on top of the OS as developers for Windows and Apples’ OS X do. It will also let web developers extend the power of their websites by expanding the capabilities of the browser, allowing websites to lean on the browser for storage and processing help.

Advertising: Google is largely powered by its innovative auction-based text ads on its own site, but then expanded into serving ads on other people’s sites with the Adsense program. It bought the ad-serving and behavioral-profiling giant Doubleclick in 2007 for more than $3 billion, and has ventured into mobile, print, radio and television ads.

Microsoft has struggled to replicate Google’s online advertising success. Despite owning MSN.com — a portal that is second only to Yahoo as a destination — Microsoft has not made money on the internet. To turbocharge its ad-delivery technology, it paid more than $6 billion in cash in 2007 for aQuantive, a full-service online advertising concern.

Instead, Microsoft’s online ad business lost $1.2 billion in 2008, double what it lost in 2007. The company expects 2009 revenues to be higher than the $3.2 billion it took in last year, but has not said it would make a profit.

Contrary to what some might have you believe, the benefits of the Google-Microsoft competition are immense.

Microsoft had largely grown complacent until Google came along to shake up categories. Gmail’s massive online storage capability and fancy programming made Microsoft hustle to upgrade its popular, though not user-friendly, web e-mail service. Google Maps led to Microsoft’s Live Maps, which now bests Google’s efforts in some ways.

Google has been winning the fight for the last few years, showing that it is still nimbler than the software giant from the Northwest. But the pendulum may be slowing, or even poised to swing the other way. With the innovations in Bing and the promise that Microsoft’s online Office offerings will be free and more fully featured than the Google equivalent, Microsoft is taking on Google where it matters for users: on the field of innovation.

And that will make for an interesting race, no matter which horse you prefer to ride — (WIRED)

E-books, such as Sony’s Readers, are less than 3 percent of the total publishing market, but are catching on fast.

“It’s much better for looking things up, since any e-reader’s search function is 10 times better than flipping and looking and searching on my own” in a printed book, said Jessup, an Erie, Pennsylvania-based writer.

He is one of a growing number of bibliophiles, spurred by new reading technologies like Amazon’s Kindle, who are gravitating to the digital realm.

Key developments in displays are improving e-book reading devices, whether it be E Ink’s displays in products like the Sony Reader and the Kindle, or the easy on the eyes organic light emitting diode (OLED) screens being used in netbook computers and smartphones. Up-and-coming technology promises to enhance e-book reading even further.

Low-power, reflective e-paper displays, which can be read in direct sunlight, are expected to hit the market in the next year from companies like Prime View International and Plastic Logic, said Nick Colaneri, director of the Flexible Display Center at Arizona State University.

“At first these will be flat and largely indistinguishable from the displays in devices like Amazon’s Kindle,” Colaneri said. “But the availability of a new feature like mechanical flexibility always stimulates the creative energies of designers.”

Truly flexible displays could be available in three to five years, Colaneri said. Electronic readers could become as thin as a sheet of paper and able to contain hundreds of book titles, magazine articles and other content.

Internet connectivity will go hand in hand with these devices, letting consumers download content from just about anywhere using Wi-Fi or mobile phone networks.

In fact, they already can. The Kindle connects wirelessly to Amazon’s store, allowing users to buy and download books to the device within minutes. Not to be outdone, Barnes & Noble recently launched its own e-book store and an e-reader app that allows users to download books to their smartphones.

Last month, Sony announced its first e-book reader with built-in wireless capability. The Reader Daily Edition will sell for $399 when it debuts in December.

Apple also is rumored to be working on a wireless tablet device with a large screen that would be better suited than an iPhone for reading digital content.

It seems the time is right for these advances. E-book sales are seeing a significant upswing, said Hugh McGuire, CEO of Book Oven, an online company that builds Web tools for publishing e-books and print-on-demand titles.

“The U.S. wholesale e-book market was about $50 million in 2008 (retail would be about double), but it’s growing exponentially,” McGuire said, citing figures from the International Digital Publishing Forum, a group that tracks the e-book market. McGuire said that in the first quarter of 2009, the wholesale market was about $25.8 million, an increase of 53 percent over the previous quarter.

McGuire concedes that e-books are only 1 to 3 percent of the overall publishing market. But the success of the Kindle, and moves by Google — who, along with Sony, is offering free titles online — indicate a bright future, he said.

“I would expect 20 percent of book sales to be digital by 2014, but some have predicted an even bigger percentage by then,” he said. “Twenty percent of the current book market is something like $5 billion.”

That raises the question: What will happen to printed books?

“E-books will gain, especially in the indie publishing market, making it far easier for a company or individual to sell a quirky, unique book for little money and see profits almost immediately,” said Jessup, the Pennsylvania author and e-book reader.

Even so, Jessup said he believes print and digital books will coexist for some time. He released his first work, “Open Your Eyes,” as an e-book, but his publisher, Apex Books, lets buyers order the book via print-on-demand. It’s also available on the Espresso Book Machine, an in-store device from On Demand Books that lets customers at independent bookstores print books.

For e-books to reach their full potential, McGuire said, a shift in thinking is in order.

“[Publishers] have long operated in an environment where printing a book was expensive,” he said. “Shipping it around, stocking it in stores and selling it all represented significant costs. They still think in this mindset.”

Publishers need to realize that e-books can get titles to more readers for less money, he said.

“Successful publishers will be those who embrace the benefits of e-books and pay more attention to what their readers want.”

By David Dritsas – CNN

Bing’s “visual search” and Google’s Fast Flip produce search results as images.

Or what if you’re in the market for a new camera? You saw a friend with a credit-card-thin model at a party last weekend. But was that a Canon? A Nikon? A brand you’ve never heard of?

If you’re like many people, you’d turn to the Internet for answers. But you type in “dog breeds” or “digital cameras” into Google and punch enter, and a big list of blue links comes up. You don’t see the dog you want. You don’t find the camera, either — at least not quickly.

Such quandaries are the driving force behind Bing’s new “visual search” function, which lets Web users troll through image catalogues instead of Web pages when they know what something looks like but can’t put their finger on the name.

The examples are also evidence that the search engine market, once dominated by simple rectangular search bars and the lists of Web pages that follow, is diversifying. People who once were happy with a one-search-fits-all model are finding exceptions, and a number of niche search products are trying to respond to these increasingly diverse needs.

Also this week, Google introduced a test product called Fast Flip, which takes a retro look at Web design by making online news look like something magazine readers will find familiar.

The company has other news products — namely Google Reader and Google News — but is looking for ways to make news content more visual and to share some of the revenue.

The new products come as Microsoft’s Bing continues to elbow for more room in an online search market that Google has dominated for years. In June, 65 percent of all Internet searchers were done through Google sites, according to comScore. Microsoft caught only 8.4 percent of searchers in the same period.

Fast Flip, an experimental feature of Google Labs, is a Web application that allows users to scan news articles from 39 print and online publishers, including The New York Times, Newsweek, TechCrunch and Us magazine.

Users can “flip” through a horizontal stream of screen grabs of articles as they appear on the partners’ Web sites, with layout, design and images intact. You can click once on a story to enlarge the page; a second click takes you to the partner’s site. Users also can browse popular topics (the economy, Taylor Swift) or search for others of their choosing.

Google says the idea behind the new service is to make online news-browsing faster and replicate the reading experience of flipping through a magazine or newspaper.

Unlike Google News, which emphasizes breaking news articles from the past 24 hours, Fast Flip “is more for stories with a longer shelf life,” Google spokesman Chris Gaither said.

“We think there’s a lot of room for innovation in how people consume news articles on the Web,” Gaither said. “The easier it is for people to browse articles quickly, the more they’ll read.”

Loren Baker, editor of Search Engine Journal, says that increases in bandwidth make “visual search” functions more successful today than in previous years, when images would load more slowly.

Baker believes that Google Fast Flip could make it easier for people to scan news articles on their netbooks, tablets or even smartphones.

“I don’t have to sift through my bookmarks. I don’t even have to leave Google,” he said. “It’s almost like a virtual newsstand on my handheld.”

But not everyone is excited about Google’s new product.

“If this is the future of news, I think news is kind of screwed,” said Frederic Lardinois, a writer at ReadWriteWeb, a technology blog. Lardinois said the interface is backward-thinking and is hard to use.

Fast Flip is in a test phase and will incorporate feedback from users, Gaither said. Google also is seeking to expand the roster of Fast Flip partners, he said.

Some tech observers say Bing’s hyper-visual search function gives it a new leg up on Google in terms of functionality.

Nova Spivack, a search expert and founder of Twine, said the most important thing about Bing’s visual search is that users can sort the images into categories.

By creating different kinds of searches and making them sortable, Bing is catering to high-end Internet users — which, soon, will be everyone, he said.

“I think Bing has realized that everybody is becoming a search geek,” he said.

On the dog-breed search example, users can filter the images to include only terriers, or hypoallergenic dogs or toy dogs, or dogs that need a medium level of exercise, so they don’t have to scroll through hundreds of photos to find the dog they’re searching for.

Mary Jo Foley, editor of the All About Microsoft blog at ZDNet, said she personally finds Bing’s visual search useless because she’s not a visually minded person. But she said it’s an example of search engines diversifying, and that’s a good thing for everyone.

“I think the idea for Microsoft and Google and Yahoo is to present things in new ways and say, ‘What if you could do this? Would you want to do it this way?’ ”

She added: “Not all people search in the same way, and not all people want to get their results in the same way.”

There are about 50 galleries of images in the new Bing visual search bin, but more will be added, and eventually the idea will be integrated into the main search site, said Stefan Weitz, director of Bing. Right now, users have to go to a separate page to find the visual searches.

David Coursey, a blogger at PCWorld.com, said the search works like a “visual dictionary.”

“I think Bing is onto something,” he said. “And if they can figure out how to extend Bing’s visual search, it could be very helpful for people who know what something looks like but don’t know what to call it.”

By John D. Sutter and Brandon Griggs
CNN