Can Microsoft beat Google with aQuantive?

Vs.





The answer is NO.

There is a saying in ancient indian culture. Cat saw tiger and burned itself with a hot iron rod to look like Tiger with stripes. Microsoft is trying to do the same with Google.

Google is a true champion. It follows the philosophy of, get good at one and you can follow the same in other areas. When Google entered Search market, it was not alone. MSN, Yahoo, Altavista and many more. Google's motto was KISS, Keep It Simple Stupid. It got into consumer good books and anything and everything that Google does is looked at carefully and respectfully.
The key to consumer facing product is Simplicity and End User Perception. Google got both of them right in its first attempt. Google search was the best. It is simple and it has got reputation. I started using google when a friend of mine told me about it. Once it beefed up revenues in Advertising, Google knew what to chase after next, Microsoft's Market in a service oriented model. (Desktop Apps, Email, Messenger)

Microsoft is a different beast. It is kind of legacy compared to Modern day jewels like Google. Microsoft made all its money by selling products, unike Google. Now with world wide adoption of its products, it is still expanding its market. But with increasing competion from MAC & Linux and pressure to enter into new markets before its competition does, have been constantly bothering Microsoft, forcing it to make the decisions like TellMe and aQuantive acquisitions.

I Agree that aQuantive has built up a good business model and cash flow positive. Its advertising technologies are really cool. Biggest problem is the adoption. I do think there is atleast a window of year to two years before anyone starts adopting these technologies. That gives Google the time they need to come out strong in that area.

I think it is long ways from here for Microsoft to beat Google in online advertising market with this acquisition. Here is why: For the Quarter ended March 31'2007, MSFT online services business lost $200 million on $623 million revenues. For the same time Google gained $1 billion on $3.7 billion revenues. aQuantive made $14.2 million on $143 million revenues. A drop in a lake.

So in conclusion, i think Microsoft is trying to create/build a Market base for Service oriented products for itself. Time will be the judge on the outcome.

Cheers...