Microsoft Sees a Google Future

Redmond changes a vital way of doing business to mimic Google, and to respond to search giant's competitive challenge

SAN FRANCISCO – For two hours here this week, Microsoft Chairman Bill Gates and Chief Technology Officer Ray Ozzie explained how a concept known as "live software" now guides Microsofts future.

The two never mentioned Internet search provider Google Inc. Yet Google played a huge role in shaping Microsofts just-announced technology "sea change," Internet industry watchers say.

Live software, loosely defined, means distributing services over the Internet, rather than forcing manufacturers to embed the programs into a device, or for consumers to get their hands on the software via an Internet download or compact disc.

/zimages/5/28571.gifClick here to read more about Microsofts new "live" initiative.

Google has built its business from day one on the live software concept. And, now, so apparently does Microsoft, which means a dramatic shift in its day-to-day operations. Microsoft flagship products Windows and Office software will still be sold on CDs, as has been the case for decades, but some elements are already available online, and many others will soon be.

"This is the clearest evidence yet that Microsoft is getting Googles message," said Carmi Levy, senior research analyst at Info-Tech Research Group, a technology consultant. "Google has clearly shifted software towards a new, Web-based paradigm."

That opinion, a popular one nowadays, would have drawn a snicker two years ago when Google was showing how free, advertising-supported Internet search generates billions of dollars in annual revenues. But now the Mountain View, Calif.-based operation has branched out beyond search with Gmail to rival Microsofts Hotmail e-mail and Google Talk instant messaging to counter Microsofts MSN Messenger. Google is also working on using Sun Microsystems ubiquitous Java programming language to distribute its Web browser tool bar—and other Google services to come.

/zimages/5/28571.gifClick here to read more about Google and Microsofts desktop battle.

There was ample proof of Microsofts facing up to the "Google factor" during Microsofts technology preview event here Tuesday. Another new Microsoft focus is on improving adCenter, Microsofts system to place ads on its Web pages. Here too is another parallel to Google, which works constantly to extract more benefit to advertisers and consumers from its own AdWords advertising system.

Microsoft says it also plans to more intricately mesh its localized search and online mapping features, mirroring another recent Google move. (Localized search is a term of art for search engines meant to help people find nearby retailers or commercial service providers.)

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