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May 5, 2012
Is Google the new Microsoft?
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Google Drive is a file storage and sync service by GoogleGoogle’s come up with its solution for Dropbox: If you can’t buy ‘em, copy ‘em. The search engine and online advertising giant replaced its popular Google Docs service with Google Drive, a cloud computing storage service designed to directly compete with start up Dropbox. This raises the question, has Google become the new Microsoft?
Us ancient folk who remember the 1990s and the Microsoft anti-trust trial can certainly notice some parallels. A big, dare we say monolithic, company doesn’t bother innovating on its own. It just waits for other companies to innovate, makes some changes for legally significant distinctions and enters into competition with the innovator. Sound familiar?
Still, Google is not unchallenged in its supremacy. Bing has gained a bit of traction as a search engine, showing that Microsoft isn’t dead or stagnant by any means. Yahoo! is always trying to regain its place in the search engine world. And not everything Google does comes across as the Second Coming in the market. Google Plus+ currently has fewer subscribers than MySpace, if that tells you anything. So it’s by no means a done deal that Google Drive is going to push Dropbox and other upstarts out of existence.
But Google has enormous resources, underscoring a fundamental problem of the free market: Google can offer an inferior product and sell it at a loss for years, effectively starving the competition out of existence. Further, an attempt to sue them for a breach of IP isn’t hopeless, but is obviously an uphill battle. Would anyone argue that Dropbox can hire a team of lawyers as impressive as the one that Google can enlist?
The free market is often touted as the perfect place for innovation. However, Google’s entry into the world of cloud computing emphasizes one of the key limitations of the free market: larger companies can find legal ways to rob smaller ones of the core of their innovation and can comfortably afford to take a loss on the product for decades. Thus, the idea that the free market raises the cream to the top, letting inferior products fall by the wayside is more of a superstition than anything resembling actual reality.
Further examples? Well, Betamax was largely considered a superior product to VHS. Ditto on HD-DVD versus Blu-Ray. At the end of the day, it didn’t matter. The format with the most connections and best marketing was the one who prevailed. In fairness, the market still allowed us to have a videotape format and an improvement upon DVD technology. But while the market threw up the best of the best, it did not allow the superior product to prevail.
Google can’t bully everyone. Its main competitors in the world of tech are Microsoft, Facebook and Apple. Google can try to push those companies around, but it likely won’t do a whole lot. Still, this doesn’t contradict anything said above. Indeed, it underscores the broader point being made: Only companies with the resources and connections of Google are able to push back against them. This hardly makes for a good environment for innovation. 

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17 Comments
Anonymous Google closely monitors its rivals and always tries to implement what its rivals plan to implement.Google also has the strategy to buy a growing company which is a potential threat to them
May 9, 2012
Ioan Andrei Bindean Not so much. The point is that big companies tend to do that at one point, but all started with great products and i belive that new commers can also succeed just like Google did in a MS era and facebook and Apple etc. It's just Not goana be easy
May 7, 2012
Ioan Andrei Bindean For MS the biggest inovation was Windows and Office and other less obvious things. Google on the other hand made the best search engine and add service. Both of them now copy alot of ideeas from others, some are succesful, others Not
May 7, 2012
Anonymous It's not like the 90s. Fewer innovations were back then and MS actually did do a bit of innovation while they were doing some copying. Google on the other hand really is focused on getting more viewer-ship for ads and oh organizing the worlds information. With a mandate like that, they'll copy every innovation as long as it stores or transfers user data.
May 7, 2012
Russ Karlberg How is it a "problem" that Google is offering consumers tons of free services?? Sounds like a huge benefit of the free market to me. Google has no power to push anyone around - everything is strictly voluntary. If you don't like Google, simply don't use them.
May 7, 2012
Anonymous #1: DropBox is not using the File Transfer Protocol as a means for cloud storage, and therefore you incorrect and misinformed, fellow Patexia reader. #2: Google has been copying companies for ages... and is doing it a very similar way as Microsoft had done in the 90s. (http://www.theverge.com/2012/5/5/3001163/google-early-android-design-prototype-phone)... That was Android before the iPhone, a direct combination of RIM, WM6, Palm, Symbian. And look what happened after the iPhone came out and Eric Shmidt brought out his information while he was on the board for Apple and used it when he came to Google to copy Apple's model completely. #3: Drive IS a complete competitor to DropBox, Skydrive, and other services (http://www.theverge.com/2012/4/24/2954960/google-drive-dropbox-skydrive-sugarsync-cloud-storage-competition/in/2718095)... it has a Windows and Mac syncer so you can sync files besides docs as well... I don't know where you people have gotten your information. It may have started as an extension of google docs, but became a stand alone service as of late. #4: You people talk about Google being innovative.. please check out their new Chrome OS, a complete copy of Windows and Mac with their new Aura window manager (http://techcrunch.com/2012/04/09/googles-chrome-os-will-soon-look-more-like-windows-than-a-browser/). Hell look at even Google's Chrome icon.. looks like they borrowed HEAVILY from Microsoft colors from the beginning hm (http://chromable.com/wp-content/uploads/2008/11/windows-to-chrome.jpg)? #5: Need I say anything about Google's ridiculous privacy issues, their nonstop drive to create products and then just drop them when they fail.. Remind me of Microsoft of the 90s.
May 7, 2012
Tecsi Aron One could argue that what Google is doing is a direct result of the free market, and that the emergence of a mega corporation is all but inevitable given a high quality, innovative initial product and some business sense.
Don't misunderstand me companies that make more money than I can pronounce after a few drinks aren't on my Christmas list, yet Google seems to have a reputation for user friendly products that work lot better than it's competitors products(Let's not place Yahoo search and Bing on the same level as Google search. The fact that there are few companies worth of mentioning in this field dose not make them in any way competitive), and the only way to do that is to put out all the ideas and see witch one doesn't suck!
May 7, 2012
Anonymous I don't think it is the matter of IP claim here. It's about fair and unfair competition. Google and dropbox are not the same.
May 7, 2012
A Non Is sensational drivel the new insightful analysis and expository writing? Drive is storage for docs, including google docs and those you want to upload. And since when is FTP a business model that has any IP claim? Dropbox is FTP. My first and last visit to patexia.
May 7, 2012
Adam Chou I thought this was funny... "Google’s entry into the world of cloud computing..." Uhh... entry into cloud computing? Google practically invented cloud computing. Google Docs has was on the forefront of cloud computing and its been around since 2007.
May 6, 2012
Chris Robison There's a big difference between Microsoft and Google. There is nothing stopping people from using another service other than Google on the web.
May 6, 2012
Ron Johnson Any large company can bleed any small company into submission. What made MSFT a criminal was strong-arm licensing tactics.
May 6, 2012
Ron Johnson Any large company can bleed any small company into submission.
May 6, 2012
Anonymous You are right in terms of licensing deal. However, they have plenty of resources and could bleed for a long time while companies like Dropbox don't
May 6, 2012
Ron Johnson Google is *not* the new Microsoft because it can not use licensing deals to freeze competitors out of the market like MSFT did in the OS market.
May 6, 2012
Anonymous Well Microsoft also said Internet explorer was an extension of their Windows and that's how they managed to keep the competition away: by providing the IE for free.
May 6, 2012
Javier Delgado I fail to see Doogle drive as a replacement of google docs, instead is really and extension of google docs.
May 6, 2012