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Microsoft’s Bill Gates Defends Google, Then Pans It
By STEVE LOHR nytimes
Bill Gates dropped by The New York Times on Monday to discuss his full-time job as head of the Gates Foundation, the world’s largest philanthropy, especially its work in global health and development.
Mr. Gates was on his way to the World Economic Forum in Davos, Switzerland, where he is expected to announce an expansion of the foundation’s vaccine programs in poor nations.
But Mr. Gates is still the chairman and largest shareholder of Microsoft. And when asked, Mr. Gates had a few observations on the Internet search efforts of Microsoft and Google that were, by turns, acute, sardonic and tart.
Is Google a monopolist? “I wouldn’t call anyone a monopolist,” replied Mr. Gates, who has frequently been the target of that epithet over the years. He went on to say that historically companies that become “hyper-successful” invite government antitrust scrutiny, and he placed Google in that small, elite group of technology companies: AT&T, I.B.M. and Microsoft. Welcome to the club, Google. “If governments don’t care, that’s a bad sign,” Mr. Gates said.
Microsoft, the champion of the PC era, cemented its dominance because of “network effects” and “positive feedback loops,” economic terms that describe the snowballing benefits to front-runners in some markets.
Mr. Gates used those same terms to describe the challenge of trying to eat into Google’s big lead in Web search. The more people that use Google search, the more data the company has, and that data is the raw material for refining its search results further. And the greater its market share in search, the more advertisers want their ads placed on Google to reach the largest audience.
That, in turn, solidifies Google’s position as the dominant ad market, and strengthens its pricing power. “There are several positive feedback loops in this business, and they are particularly powerful,” Mr. Gates said.
Undaunted, Microsoft is investing heavily in search — “the last big investor” other than Google, Mr. Gates said, after Yahoo agreed last July to let Microsoft handle its search in return for payments. Gaining ground against Google, not catching it, is the current goal.
“We have brilliant people who dream of ways to increase our market share by one percentage point,” Mr. Gates said. (Google’s share of the American market was 66 percent in December, according to comScore, compared with under 11 percent for Microsoft.)
Mr. Gates declared himself unimpressed and a bit perplexed by Google’s recent threat to drop its search business in China to protest Chinese censorship of search after attacks apparently intended to spy on Gmail accounts of human-rights activists. “They’ve done nothing and gotten a lot of credit for it,” Mr. Gates said.
One may or may not agree with the laws in China, he said, but nearly all countries have some controversial laws or policies, including the United States. “What point are they making?” Mr. Gates asked. “Now, if Google ever chooses to pull out of the United States, then I’d give them credit.”
By STEVE LOHR nytimes
Bill Gates dropped by The New York Times on Monday to discuss his full-time job as head of the Gates Foundation, the world’s largest philanthropy, especially its work in global health and development.
Mr. Gates was on his way to the World Economic Forum in Davos, Switzerland, where he is expected to announce an expansion of the foundation’s vaccine programs in poor nations.
But Mr. Gates is still the chairman and largest shareholder of Microsoft. And when asked, Mr. Gates had a few observations on the Internet search efforts of Microsoft and Google that were, by turns, acute, sardonic and tart.
Is Google a monopolist? “I wouldn’t call anyone a monopolist,” replied Mr. Gates, who has frequently been the target of that epithet over the years. He went on to say that historically companies that become “hyper-successful” invite government antitrust scrutiny, and he placed Google in that small, elite group of technology companies: AT&T, I.B.M. and Microsoft. Welcome to the club, Google. “If governments don’t care, that’s a bad sign,” Mr. Gates said.
Microsoft, the champion of the PC era, cemented its dominance because of “network effects” and “positive feedback loops,” economic terms that describe the snowballing benefits to front-runners in some markets.
Mr. Gates used those same terms to describe the challenge of trying to eat into Google’s big lead in Web search. The more people that use Google search, the more data the company has, and that data is the raw material for refining its search results further. And the greater its market share in search, the more advertisers want their ads placed on Google to reach the largest audience.
That, in turn, solidifies Google’s position as the dominant ad market, and strengthens its pricing power. “There are several positive feedback loops in this business, and they are particularly powerful,” Mr. Gates said.
Undaunted, Microsoft is investing heavily in search — “the last big investor” other than Google, Mr. Gates said, after Yahoo agreed last July to let Microsoft handle its search in return for payments. Gaining ground against Google, not catching it, is the current goal.
“We have brilliant people who dream of ways to increase our market share by one percentage point,” Mr. Gates said. (Google’s share of the American market was 66 percent in December, according to comScore, compared with under 11 percent for Microsoft.)
Mr. Gates declared himself unimpressed and a bit perplexed by Google’s recent threat to drop its search business in China to protest Chinese censorship of search after attacks apparently intended to spy on Gmail accounts of human-rights activists. “They’ve done nothing and gotten a lot of credit for it,” Mr. Gates said.
One may or may not agree with the laws in China, he said, but nearly all countries have some controversial laws or policies, including the United States. “What point are they making?” Mr. Gates asked. “Now, if Google ever chooses to pull out of the United States, then I’d give them credit.”