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(Contact Info: larry at larryblakeley dot com)

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I manage this Web site and the following Web sites: Leslie (Blakeley) Adkins - my oldest daughter

Lori Ann Blakeley (June 20, 1985 - May 4, 2005) - my middle daughter

Evan Blakeley- my youngest child

For Eric Schmidt, Google's CEO, 2004 was a very good year. His firm led the search industry, the fastest-growing major sector in technology; it went public, raising $1.67 billion; its stock price soared; and its revenues more than doubled, to $3 billion. But as the search market ripens into something worthy of Microsoft's attention, those familiar with the software business have been wondering whether Google, apparently triumphant, is in fact headed off the cliff.

Despite everything Google has - the swelling revenues, the cash from its initial public offering, the 300 million users, the brand recognition, the superbly elegant engineering - its position is in fact quite fragile. Google's site is still the best Web search service, and Gmail, its new Web-based e-mail service, Google Desktop, its desktop search tool, and Google Deskbar, its toolbar, are very cool. But that's all they are. As yet, nothing prevents the world from switching (painlessly, instantly) to Microsoft search services and software, particularly if they are integrated with the Microsoft products that people already use.

Until now, competition in the search industry has been limited to the Web and has been conducted algorithm by algorithm, feature by feature, and site by site. This competition has resulted in a Google and Yahoo duopoly. If nothing were to change, the growth of Microsoft's search business would only create a broader oligopoly, similar, perhaps, to those in other media markets. But the search industry will soon serve more than just a Web-based consumer market. It will also include an industrial market for enterprise software products and services, a mass market for personal productivity and communications software, and software and services for a sea of new consumer devices. Search tools will comb through not only Microsoft Office and PDF documents, but also e-mail, instant messages, music, and images; with the spread of voice recognition, Internet telephony, and broadband, it will also be possible to index and search telephone conversations, voice mail, and video files.

The emergence of search standards would encourage tremendous growth and provide many benefits to users. But standardization would also introduce a new and destabilizing force into the industry. Instead of competing through incremental improvements in the quality and range of their search services, Microsoft, Google, and Yahoo will be forced into a winner-take-all competition for control of industry standards.

In short, the search industry is ready for an architecture war.

Indeed, as so many have noted, much of Microsoft's software is just plain bad. In contrast, Google's work is often beautiful. One of the best reasons to hope that Google survives is simply that quality improves more reliably when markets are competitive. If Google dominated the search industry, Microsoft would still be a disciplining presence; whereas if Microsoft dominated everything, there would be fewer checks upon its mediocrity.

- "What's Next for Google," Charles H. Ferguson, TechnologyReview.com (an MIT enterprise), January 2005

Directory: http://www.larryblakeley.com/Articles/monthly_articles/

File Name: charles_ferguson200501 (6,585 words)

Post Date: December 31, 2004 at 7:25 AM CST; 1325 GMT