“How many products, of all the Google products that have been introduced, how many of them are profit-making products?” [Bill Gates] asked. “They’ve introduced about 30 different products; they have one profit-making product. So, you’re now making a prediction without ever seeing the software that they’re going to have the world’s best phone and it’s going to be free?”
Ha! You have to love it when the shoe is on the other FUD... Billg and company barely know how to deal with it. Microsoft are the ones who have a long history of announcing vaporware products to screw over the competition, you can almost feel the shock from here that they have to deal with this sort of stuff in reverse. First the iPhone and now the potential Googlephone! "Someone call marketing! We need to make some shit up, and announce it fast!! What do you mean Comdex isn't around any more?" Maybe it's a good thing that Mr. Gates is leaving, they're definitely losing their edge in the FUD wars.
Now, I happen to sorta agree with Bill on this one, Google really hasn't been able to prove they've got more than one real revenue stream. However, that doesn't mean they haven't had a massive impact in other areas - Google Maps completely changed the way we look at the world for instance. I was cleaning out my car the other day, and discovered in a big pocket in the back of my seat a bunch of paper maps and a street atlas for Silicon Valley that I had completely forgotten about. How quaint! I haven't used a paper map in easily a year or so - if I need to figure out where I am, I pull out my phone and use gMaps. That one product may not be making Google a ton of money, but it caused everyone else in the business to spend a lot of money to keep up. Who knows how much Microsoft, AOL (MapQuest) and Yahoo! had to spend to upgrade their location software and data - money that wasn't spent on building up a better search engine or advertising system. Imagine if Google is able to pull off this same sort of innovation with whatever their upcoming 'big' mobile thing is going to be? It's going to have a big impact, even if it's not a cash cow.
Well, not that the cash is going to be missing from their mobile product - I really be surprised if that happened. When it comes to mobile, Google is already the 800 lb. gorilla, spending sick amounts of cash world wide to get their search on operator's portals and have 60%+ of mobie internet traffic to show for it. Eventually that's going to turn into real money, if it hasn't already. Beyond this, all the GOOG execs have expressed their commitment to the future of mobile, and they just put $4.6B where their mouth was to enter the FCC's wireless auctions. Combine that with the fact that they have lots of people down in Mt. View and in London hacking away at something definitely makes you wonder when the mobile shoe is going to drop, and how big of a footprint it'll make when it lands.
What Microsoft should be doing now is concentrating on their platform. Happily for them, hardware has finally caught up to the bloated OS that is Windows Mobile, and Apple has finally shown their cards and given an example of how a truly user-friendly user interface should work. Microsoft can now do what they do best - incrementally improving their products by copying the best ideas from the innovative companies out there. Working to their advantage, they have the best development tools, lots of developers familiar with their APIs, and more deals with manufacturers than anyone else and complete dominance of both the home and corporate desktop, including corporate email via Exchange installs... Mobile really is still Microsoft's game to lose, really. If they move quick and are smart about it, those companies out there looking for an iPhone equivalent will look to them. But only if they can figure out how to make their platform more appealing than say, a Goog phone or even one based on Linux.
Bitching about how Google doesn't have a real product yet isn't a good sign though. Bill's response should have been more along the lines of, "there's no way that Google can match our technology - we have several years head start on them, more developers, more apps, more users and broader reach than they'll ever be able to get," but he didn't say that. Instead he whined about how Google has lots of products and not many are profitable. That's a non-answer, really.
I honestly can't say who I'd like to see come out on top here... I have a long-standing antipathy towards Microsoft, but Ray Ozzie is my hero. And though Goog is here in my home town of Silicon Valley, they're generally annoying and could use a nice high-profile flop. Since I don't really want to choose between the lesser of two 'don't be evil's here, I'll just have to cross my fingers for Ubuntu Mobile.