The Google-AOL Deal: Commentary From The Cheap Seats

The defection of Dr. Kai-fu Lee to Google is the first digit to fall from the leprous giant, Microsoft-the outward manifestation of a bigger problem long in the making. That which made the software giant tall, the nourishment of cutting edge engineering, is also the chief repast of the unexpected rival in Google. The nervous tapping of billionaire fingers can be heard all the way from Redmond.

"We need to do this to stop Google," Bill Gates is reported to have said to Dr. Lee referring to the lawsuit aimed at preventing Lee from working for the search engine.This was just months after Lee sat in on a top-secret executive meeting entitled "The Google Challenge."So why is a software company who controls 90% of the desktop market shaking in its giant boots over a search engine start-up? Simply put, the PC is passé.

Honestly, while a near monopoly is a surefooted position in the future, that future is lackluster when most have a PC that works as well as they need it to, serving as a sufficient portal to the more important utility-the Internet.

"A new science is being defined in an area that will take over much of what we do commercially and socially," said Usama Fayyad, chief data officer and senior vice-president at Yahoo to Business Week.

Not only is Microsoft having trouble establishing their foothold in the ever-evolving and explosive search market (currently only handling 15% of queries and declining), but the company that brought PC utility to the world is losing top executives as well as the greener future stars of the industry to Google and Yahoo, fished from Redmond's back yard.

Business Week Online reported on the recent challenges Microsoft faces in recruiting the brightest of the computer science world.
Oren Etzioni, a professor of computer science at the University of Washington in Seattle, told them that Google has hired most of the top one-third of his search class for the past two years.

"High-profile researchers are now flocking to the search engines," echoes Marti Hearst, associate professor at the University of California at Berkeley's school of information management and systems.

It's certainly no secret to Excite.com pioneer Joe Kraus, either.

"If you're talking to someone great, they're invariably talking to Google, and they often have an offer," he said.

Google has been in a hiring frenzy over the past year. The company roster has nearly doubled from 2292 in June 2004 to the current 4183 full-time employees (4184, if you count Dr. Lee). In the second quarter of this year, Google hired 230 engineers, no doubt the best around.

Yahoo has been in the mix as well, taking on Larry Tesler, former VP at Amazon.com, and Prabhakar Raghavan, a first-rate authority on algorithms formerly of search-software firm Verity.

So where does all this leave Microsoft? Nervous as they experience something they're certainly not used to-losing. As Google and Yahoo explode in the second quarter to handle nearly 9 billion queries and 69% of the search world, MSN had to swallow a 4% loss in search queries.

Microsoft will have to be extra aggressive in the future to secure a position, and employees.

  Latest articles

E-Commerce Fraud Highest in New York City, Miami and Los Angeles

Microsoft's Google Challenge

Yahoo Boasts Size of Its Search Engine Index

Melbourne IT 2005 half-year results

Google's New World Order