Google and Microsoft are at each other's throats over everything from patents to Android and Windows Phone market share.
Microsoft are at each other's throats over Android.
rivalry between the two tech giants exploded this week, with executives trading
barbs on Twitter and blog posts over patents related to mobile technology.
burst of aggression has its roots in a high-stakes auction that took place
earlier this year. Microsoft and a handful of other companies submitted a $4.5
billion winning bid for some 6,000 patents and patent applications formerly
owned by Nortel. Google wanted the same property, but its own bid of $900
million couldn't quite seal the deal.
seems concerned that Microsoft and its consortium partners (which include
Apple, not exactly the search-engine giant's bosom buddy) will use those
patents to sue Android manufacturers into the ground. Indeed, Microsoft is
rapidly making an industry out of what it claims are Android's violations of
its intellectual property: in addition to squeezing royalties from any number
of Android-device manufacturers, the company has filed patent-infringement
suits against Motorola (maker of Android-based smartphones and tablets) and
Barnes & Noble (which produces the Nook, an Android-based e-reader).
Apple have always been at each other's throats, so when they get into bed
together, you have to start wondering what's going on," David Drummond,
Google's senior vice president and chief legal officer, wrote in an Aug. 3
posting on The
Official Google Blog
. "Fortunately, the law frowns on the accumulation of dubious
patents for anticompetitive means-which means these deals are likely to draw
regulatory scrutiny, and this patent bubble will pop."
He went on to
claim that the Justice Department is "looking into whether Microsoft and Apple
acquired the Nortel patents for anticompetitive means."
executives felt compelled to fire back.
we bought Novell patents to keep them from Google," Brad Smith, Microsoft's
general counsel, wrote in an Aug. 3
. "Really? We asked them to bid jointly with us. They said no."
The same day,
Frank Shaw, Microsoft's corporate vice president of corporate communications, also
: "Free advice for David Drummond-next time check with Kent Walker
before you blog."
He included a
link to an Oct. 28 email sent to Brad Smith by Kent Walker, Google's general
counsel, suggesting that "a joint bid wouldn't be advisable for us on this
let Microsoft blow a hole beneath the waterline of his tight little narrative,
Drummond updated his original post Aug. 4: "If you think about it, it's obvious
why we turned down Microsoft's offer," he wrote. A joint acquisition of the
patents "that gave all parties a license would have eliminated any protection
these patents could offer to Android against attacks from Microsoft and its
A number of
analyst estimates have Android leading the mobile market. According to recent
data from Nielsen, for example, Android held 39 percent of the U.S. smartphone
market, followed by Apple's iPhone with 28 percent, RIM with 20 percent, and
Microsoft with 9 percent. Similarly, research firm comScore placed Android's
share of the U.S. market at 40.1 percent, followed by Apple with 26.6 percent,
RIM with 23.4 percent and Microsoft with 5.8 percent.
Microsoft CEO Steve Ballmer's recent admission that Windows Phone's market
share is "very small," it seems Android is handily winning the mobility wars
despite Microsoft's patent maneuvers. That being said, Microsoft seems to have
found a viable source of revenue in its latest string of Android lawsuits and
"royalty agreements," something the company is likely to vigorously push in
quarters ahead; Jack Gold, founder and principal analyst of J. Gold Associates,
that Microsoft's cash stream from Android royalties could even
top that of Windows Phone.
Google's core business-search-continues to outpace Microsoft's Bing, although
the latter has enjoyed incremental market share gains over the past several
quarters. Microsoft has demonstrated a willingness to burn hundreds of millions
of dollars to keep itself in the search game, something that makes its
investors nervous-but doesn't seem to have any appreciable effect on Google's ability
to earn lots of cash from advertising.
continues to handily dominate Microsoft in the actual mobility and search
markets, but Microsoft has a variety of good legal cards to play in order to
make life more difficult, both for Google and its manufacturing partners. In
other words, look forward to some messy battles (and more irate blog and
Twitter posts) to come.
Nicholas Kolakowski on Twitter