The growth of online services is pushing Microsoft to reconsider the long-term potential of its software. But if Microsoft begins to seriously pursue web services, Gartner research fellow Tom Bittman thinks they’ll have trouble reconciling two very different businesses:
“Can high-volume, high-margin software compete against high-volume, low-margin advertising?” he said. “It’s the clash of two models.”
Bittman also wonders whether Microsoft will destroy its existing software business in pursuit of better online service products, and thereby devalue itself:
“I think Microsoft can win, but in the end it means Microsoft loses, unless there is some other magic there we don’t see.”
And is Google Base just another step on the way to world domination by Google? From John Battelle:
the company would like to provide a platform that mediates supply and demand for pretty much the entire world economy.
David Berkowitz explains.