Web 2.0 heats up Google-Microsoft battle

A partnership between Google and Sun Microsystems inked in October strengthens arguments that the tight-lipped search king is positioning itself to be a major platform player of the next-generation Web, or Web 2.0. Distribution of Google’s search toolbar bundled with Java on the desktop is the core of this deal, bringing Google in line for a showdown with Microsoft.

The intensifying competition between Google and Microsoft, however, is taking place on a battlefield not yet fully defined. Web 2.0 promises abound of a user experience that goes beyond HTML and the browser thin-client model to a far richer interactive environment. This spells revenue opportunities up for grabs, as people do more online from any type of device.

As a bridge into the currently nascent Web 2.0, technologies such as AJAX pose as a rich-client in a thin-client world. But in a full-blown Web 2.0, Google and Sun plan for the Java Runtime Environment to be the rich-client interface.

Microsoft has its own plans for Web 2.0 to roll out onto desktops and devices running the Windows Presentation Foundation and the Windows Communications Foundation, both runtimes of Windows Vista.

But doesn’t Google already have access to a growing number of desktops through the open-source browser Firefox? Only to a point. Firefox supports Google search in the toolbar, but Firefox is a thin-client — an HTML interface. The Java Runtime Environment, on the other hand, opens a window to a richer world of content and information than is possible through just the browser. Web 2.0 takes advantage of higher bandwidth, faster processing and better graphics — the opposite of computing requirements that drove HTML success.

Web 2.0 also takes advantage of what’s coming to be known as remixing. The term has nothing to do with DJs and turntables, though; rather, applications and information are the target. Remixing combines two or more information or application services together.

Open standards and open APIs are enabling the right-brained to really shine with unique new ideas built on top of what’s already available. All sorts of broad and niche markets are starting to be served in this new way. For example, Google’s map service is combined with salesforce.com customer contact to help sales people plot their day in a click.

Currently, Google’s revenue is earned primarily through pay-per-click advertising. Advertisers bid on the value of having a link to their site placed alongside given search terms. As the market for online advertising grows, ads placed strategically on remixed content are going to provide revenue streams important to success in Web 2.0.

Despite being well-positioned in a high-growth market, the smart folk at Google are surely not dumb enough to take on either Microsoft or the Web 2.0 frontier themselves. The intent must be to build the platform plumbing — roundtrip from the Web to the desktop — to enable partners to do their thing. Google provides some services itself, such as search, e-mail, instant messaging, map lookup, language translation and more to come.

But the real strength that Google is now starting to exhibit is the growing platform on which other vendors can build new and interesting software application services.

Google has its work cut out for itself, though, as building and managing a vibrant partner ecosystem around a platform is an art mastered by Microsoft a long time ago.

Web 2.0 is evolving very slowly alongside the legacy of the HTML-enabled Web — don’t expect overnight changes. Microsoft and Google likewise will see slow change in how they serve their customers and how they make money.

Google lives mostly on ad sales and Microsoft mostly on software sales; both are broadening their portfolio of offerings to capture share in the next-gen Web. And the two will tangle more often as Google extends its search supremacy into Microsoft’s desktop domain.

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— Senf is the manager of IDC Canada’s Canadian Software Research service. He can be reached at [email protected].

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