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    Home IT Management
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    Apple, Google CEO Shakeups Unlikely to Benefit Microsoft

    By
    Nicholas Kolakowski
    -
    January 23, 2011
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      Apple CEO Steve Jobs elected to take a leave of absence from his company Jan. 17, reportedly for health reasons. Three days later, Google CEO Eric Schmidt announced he would hand over the reins to the company’s co-founder Larry Page.

      Both those seismic events have pundits and analysts questioning the future of the two companies. But it also remains to be seen how those CEO transitions will play into the hands of Microsoft, which competes fiercely against both companies in the mobile and search arenas.

      Apple has declined to offer any specifics about Jobs’ condition, although the CEO wrote in a Jan. 17 e-mail to employees that he would continue to hold the CEO title, in addition to remaining “involved in major strategic decisions for the company.”

      Jobs has almost certainly implemented a long-term strategy for Apple, and company COO Tim Cook-widely considered a top candidate for eventually taking the CEO slot-has demonstrated his ability to keep the company running despite Jobs’ periodic absences.

      “Apple’s products are not created overnight,” Tim Bajarin, an analyst with Creative Strategies, told the Los Angeles Times Jan. 20. “Products that will come out this year were designed two years ago. Products coming out in 2012 were worked on and put in motion last year. And the products for 2013 were already on the drawing board this fall and all have Jobs’ stamp of approval on them.”

      In other words, Apple is not exactly about to collapse overnight due to Jobs’ medical issues, which means that Microsoft-currently seeking all possible advantages in the smartphone and tablet markets-is unlikely to gain any advantage from its rival CEO’s twist of fate.

      It’s a similar situation with Google, whose most recent quarterly earnings report included $8.44 billion in revenues, earnings per share of $7.81 and a net profit of $2.54 billion. The search-engine giant also announced that Google co-founder Page will take the reins from Schmidt as CEO, and will oversee day-to-day operations such as product and technology development.

      Under Schmidt’s tenure, Google introduced an array of products that had varying effects, from the successful Gmail to the crash-and-burn Google Wave collaboration tool. This past quarter, the company launched its eBooks initiative, meant to compete against both Amazon.com’s Kindle franchise and Apple’s e-bookstore, along with the Samsung Nexus S smartphone. The company’s Google Android operating system has appeared on a rapidly growing number of devices in the past several quarters, threatening Apple and eclipsing Microsoft in the mobile arena.

      “Google has transformed from a scrappy little underdog search engine into a massive advertising and technological powerhouse,” Danny Sullivan of Search Engine Land wrote Jan. 20. “The start-up culture seemingly has been largely swallowed by the inevitable bureaucracy that comes with getting bigger. Meanwhile, it has faced challenges in convincing new and key employees that it remains the place to be, versus rivals like Facebook.”

      Indeed, much of the inevitable pundit commentary seemed to focus on Facebook as Google’s biggest rival, as opposed to Microsoft. Despite Microsoft’s investing hundreds of millions of dollars in its online efforts, and Bing’s steady market-share climb since its summer 2009 release, the company has yet to seriously threaten Google’s long-standing lead in that arena.

      According to research firm comScore, Google held a 66 percent share of the search-engine market through November 2010, compared with Yahoo at 16.4 percent and Bing at 11.5 percent. Both Yahoo and Google lost incremental share that month to Microsoft. However, given how Yahoo’s search is powered by Bing in the United States, the matchup in that scenario is pretty much Google vs. Microsoft.

      Microsoft’s recently released Windows Phone 7, a total revamp of the company’s previously moribund smartphone franchise, is likewise designed to take on both Apple’s iOS and Google Android for the right to feed the Web and applications to people’s handsets. Apple’s iPhone and Android devices such as the Droid X currently dominate the consumer market, and are making substantial inroads into the enterprise against Research In Motion’s longstanding BlackBerry franchise.

      During January’s Consumer Electronics Show in Las Vegas, Microsoft executives claimed approximately 1.5 million Windows Phone 7 devices had been sold to retailers by manufacturers in the platform’s first few weeks of release. However, the company has remained reluctant to reveal how many of those devices may have found their way into consumers’ hands, and one LG Electronics executive recently termed the rollout “less than we expected.”

      In other words, despite the shakeups at both Apple and Google, chances are the short-term advantages for Microsoft will likely be negligible.

      Nicholas Kolakowski
      Nicholas Kolakowski is a staff editor at eWEEK, covering Microsoft and other companies in the enterprise space, as well as evolving technology such as tablet PCs. His work has appeared in The Washington Post, Playboy, WebMD, AARP the Magazine, AutoWeek, Washington City Paper, Trader Monthly, and Private Air. He lives in Brooklyn, New York.

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