The King is Dead. Long Live the King.

google.jpgThere was a lot of talk last week about Google’s recent quarter with profits rising by 69% in the quarter. Google’s got its groove back and it is becoming clear that it is not just an expansion of the pie, but it is at the expense of its rivals. Elinor Mills of CNET News explains:

The contrast between the financial results announced last week for the two top search engine companies couldn’t have been more stark… Google’s share is rising at the expense of Yahoo and Microsoft. While Google’s share rose 6.1 percentage points last year, Yahoo’s fell 0.6 percentage points and Microsoft’s dropped 1.1 percentage point, ComScore numbers show.

There is no better predictor of the future than the past. And interestingly, we’ve seen this story before, played out in previous generations of the computing era. Each computing era has had its own killer app, and each of these eras is marked by the struggle for dominance with an eventual winner being crowned. King Microsoft, it’s time to hand the throne over to Prince Google.

In my lifetime, the three killer apps have been: operating systems, followed by office productivity software, and now in the internet age, search. Each of these have been figurative money factories for the winners. And each has been marked by a fierce struggle with an eventually winner being crowned (soon followed by talk of monopoly power).

Let’s take a look at these battles:

Battle of GUI Operating Systems: 1984 – 1995 (1)

  • Combatants: Apple (Mac OS, 1984), IBM (OS/2, 1987), Microsoft (Windows, 1985)
  • Apple took the early lead in the battle for the GUI operating systems with the introduction of the first Mac OS. Microsoft didn’t start to establish it’s dominance until the introduction of Windows 3.1 in 1992. IBM took at swing at reclaiming the operating system of the personal computing platform it created in 1987 but it never got traction. By 1995 with the introduction of Windows 95, the war had been won by Microsoft.
  • Winner: Microsoft

Battle of the Office Software Suite: 1990 – 1995 (2)

  • Combatants: Apple (AppleWorks 1991), Corel (Corel Office, 1991), Lotus (Lotus SmartSuite, 1992), Microsoft (MS Office, 1993)
  • In the early 90’s software makers started to bundle word processing software with spreadsheet software. Wordperfect had been the leading word processing software until Microsoft released its Office Suite. Lotus was an early player too, led by its early spreadsheet software, Lotus 123. Microsoft eventually established dominance as compatibility became crucial for collaboration, driven by its ubiquity in the business world.
  • Winner: Microsoft

Battle of Internet Search: 1996 – 2007 (3)

  • Combatants: Ask (1996), Google (1998), MSN Search (2005), Yahoo Search (2004)
  • The first Internet era created search engines. They were features of portals that were somewhat of an afterthought because the money was in banner ads. Goto.com, (later Overture) invented search advertising business model in 1998 (4). And immediately a business was created out of search. Google soon perfected the the search advertising business model with the launch of Adwords in 2000 (5). And though Yahoo, MSN, & Ask all relaunched their search engines during the mid-2000’s, Google’s dominance has been established.
  • Winner: Google

I believe that it is time to close the chapter on this era’s killer app: search advertising. Google is clearly dominant and is pulling away from the field. I wonder what the next great business model will be.