The States Chase Microsoft, Google In Tow

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The Justice Department seems satisfied that Microsoft (NASD:MSFT) is abiding by its 2002 deal not to act like a huge monopoly laying siege to all of its smaller competitors. Several state attorneys general do not see it that way. They believe that competition has not been flourishing in the desktop software business and that Microsoft is to blame.

It may be that, in this argument, Google (GOOG) has turned out to be Microsoft’s best friend. Other company like Symantec (SYMC) have shown that they can take the lion’s share of revenue for PC security. Windows Media is no longer the preferred format for online video. Adobe (ADBE) and its Flash format enjoy that distinction. If the government had not pressured Microsoft five years back, these things might not be true.

But, it is Google that makes Microsoft’s point in two ways. The search company obviously has at least 50% of that critical market on the PC. And the company is launching desktop applications for word processing, spreadsheets, and power-point. Google is likely to continue to move into these markets with server-based applications, and most press and pundits thing that the company can do a good job of taking a piece of Microsoft’s big revenue pie.

And, of course, there is always Linux, if it can ever get its act together.

Douglas A. McIntyre