LyrArc Article Gist
Why is Microsoft so concerned about Google's dominance in the search ad market? Microsoft could face a shrinking price of its Office suite of products which are installed not downloaded, as the whole industry shifts to downloaded software which is available either free or for a modest price with the software companies making money on advertising. Its entire model of extracting premium price on its software products which are installed on new computers or sold through stores is at risk as customers shift to the easily dowloadable software for things that Microsoft software now performs and as these software get better and more sophisticated. As it sees no way to penetrate search ad markets it is focussing on display ad markets. But experts do not see Microsoft having a good chance in the display market as both Yahoo and Google are also competing in this space vigorously. Meanwhile Microsoft stock which was about $54 in 2000 when Ballmer took charge is now stuck at $29 and has not done well throughout this period.