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If you’re wondering where those anti-Google ads came from

If you’re wondering why political-style anti-Google ads are suddenly running everywhere, it’s no coincidence. Microsoft has hired one of Bill and Hillary Clinton’s advertising masterminds to try his hand at campaigning against Google.

While it seems to be having some effect on public opinion, its effect on market share and Microsoft’s bottom line will take more time to gauge. But I think in the long term, talking to customers and figuring out why they are walking out of Microsoft stores empty-handed will prove more effective.

Microsoft’s fundamental problem is that for the first time in a good 15 years, they’re having to compete against more than one other company, and even then it was different. In the mid 1990s, Apple and IBM were competing from the awkward position of also being business partners. In 1995, Macintosh business buyers turned around and bought Microsoft Office while Mac home buyers bought machines bundled with Encarta, Works, and other Microsoft software, with the odd result that Microsoft made more money on the average Mac sale than Apple did. And while one division of IBM was trying to compete by selling OS/2, IBM’s PC division continued to ship PCs with Windows, which allowed Microsoft to pit one division of IBM against another.

Today, Microsoft still dominates traditional PC sales, but the growth is in smartphones and tablets and online, where Microsoft is still trying to figure out how to compete. Oprah Winfrey tweeting about how great Surface is from an Ipad didn’t help. Microsoft’s main strategy seems to be to change everything so people have to re-learn stuff, so they get endorsements from book authors and magazines who see a bonanza of being able to sell new Dummies books every time Microsoft releases a new product, but even that has the possibility of backfiring. In computer stores, I’m seeing Windows 7 and Windows 8 machines for sale side by side, and the few people I know who have tried Windows 8 don’t like it because it’s too different. Meanwhile, Google is releasing Android-based netbooks, and there’s really nothing saying that Android couldn’t scale up into traditional PCs as well, especially if Microsoft fails to deliver a competent successor to Windows 8.

I don’t see any of this as a bad thing. The industry was virtually stagnant from about 1999-2008 because Microsoft had no viable competition. Then, late in the previous decade, Apple figured out how to make money by selling something other than fancy computer hardware, and Google decided to expand into smartphones. Then both figured out how to make tablets that people actually want, something Microsoft had been trying to do since the turn of the century without success.

Microsoft can smear Google all they want, but at some point, they’re going to have to get around to delivering a product that people actually want to use. Because, if Microsoft pays attention to its own history, even in the early 1990s they were successful even while being unpopular. When Microsoft attempted to buy Quicken, the first story I read about it ended with a quote: “Everyone’s favorite software company just got bought by everyone’s least favorite software company.”

Few people liked Microsoft in 1994, but they kept buying their software anyway. Microsoft cried all the way to the bank.

Now that Microsoft finally has viable competition, the industry is moving forward again. Microsoft, Apple and Google are all corporations made up of human beings, so none is infallible. Competition is the only thing that will keep the three of them honest.

So competition is a good thing, and no amount of propaganda will change that.

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