It’s fashionable these days to refer to Microsoft as a dinosaur whose products and thinking are stuck in the 20th century. The company that was convicted of being an illegal monopoly not all that long ago is today thought of as relatively tame. The momentum these days seems to be with Google, Apple and newcomers such as Facebook and Twitter. But the fact is, Microsoft continues to be a mighty force.
Indeed, based on what I saw at the Wall Street Journal‘s D: All Things Digital conference in Carlsbad last week, there is still plenty of tread on Microsoft’s tires.
Microsoft CEO Steve Ballmer was one of the speaker’s at D, where he responded to questions from conference co-host and Wall Street Journal Personal Technology columnist Walt Mossberg. Although upbeat on Microsoft, Ballmer was not optimistic about a quick economic turnaround, saying “to think that things would be back in a year seems naive to me.” He went on to say that it could be a very long recovery and “maybe today is normal and yesterday was a blooper.”
He also said that Microsoft has flattened out its research and development spending. It’s not that it has stopped investing in new products; it’s just that it is no longer continuing to increase the level of spending at a steady rate.
Still, the company has been productive in recent months. For one thing, it’s only a few months away from releasing Windows 7, which Ballmer confirmed should be ready in time for the holidays.
I’ve been testing Windows 7 for months and, based on my experience, it’s the best and most stable operating system Microsoft has ever created. My PC that runs a Windows 7 “release candidate” still occasionally slows down and even crashes but far less often than with Vista or XP.
And the user interface — especially the ability to peer into the windows of running programs by clicking on their icon on the task bar — makes using Windows a lot easier.
But the big news at D was about search. Ballmer officially unveiled the company’s new search engine, which it is calling Bing. Bing.com will go live on June 3, but if you go to the site now, you’ll see a preview video. Before unveiling Bing, Ballmer showed a video about all the different brands that Microsoft has applied to its search efforts, including MSN Search and Live Search. Ballmer thinks that Bing is more likely to resonate with users. “Brand doesn’t substitute for innovation, but innovation doesn’t substitute for a brand consumers can get their mind around,” he said.
It would be a gross exaggeration to call Bing a Google killer, but that’s OK. Google doesn’t have to die for Microsoft to succeed in search. Besides, Ballmer made it very clear that he doesn’t expect Bing to overtake Google in the foreseeable future. Microsoft, if anything, is persistent. It took three tries before Microsoft Word was worthy of becoming the dominant word processing program, and it wasn’t until version 3.0 that Windows began to get serious traction.
To differentiate itself from Google, Bing is not only visually more attractive, it’s also more informative. Functioning as what Microsoft is calling a “decision engine,” rather than simply linking you to sites, Bing searches often end with information directly from Bing. For example, if you type in the name of a city you get local weather, hotel prices and other information without having to click anywhere. And, depending on the content licensing rules of sites that Bing draws from, it can sometimes display content directly — from Wikipedia for example — without the user having to click through. It even has a built-in shopping engine that, when you search for a product, shows you images, offerings from multiple merchants as well as product information, customer reviews and expert reviews.
The search engine also helps you find travel deals and lets you book travel without having to leave the site. I’m not sure how well it works, but it includes a “price predictor” that helps determine if the price of the ticket you’re thinking of buying is likely to go up or down.
Despite Google’s current dominance, search doesn’t have to be a winner-takes-all business. If Microsoft can increase its market share gradually over time, it stands to take in billions in additional revenue. In the meantime, Google isn’t standing still. Just as Ballmer was in Carlsbad talking about Microsoft’s foray into search, Google executives were in San Francisco talking about how they are beefing up their offerings, including some that will compete head-on with Microsoft’s core applications.
The economy may be in a recession, but tech isn’t in a slowdown. Thanks to startups and innovative thinking from big companies like Google and Microsoft, 2009 might be remembered as a banner year for innovation.
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