Microsoft Says Google Was ‘Wake-Up Call’

By NewsFactor Network | February 28, 2007

Watching Google Inc. rake in advertising revenue “was a wake-up call within Microsoft,” the company’s top technical executive, Ray Ozzie, said Tuesday. But he said Microsoft plans to do more than simply mimic Google by rolling out Web-based versions of desktop programs or following its particular search and advertising model.

Ozzie, who has only made a handful of appearances since his promotion last June to replace Bill Gates as chief software architect, told analysts and investors at a Goldman Sachs conference in Las Vegas that he has been laying the groundwork for programmers across the company to build Internet-based software.

“There is a sea change going on in the industry,” Ozzie said. In a question-and-answer session broadcast over the Internet, he likened the current shift to the way the PC era that took off in the 1980s marked a move away from centralized mainframe computing.

But Microsoft has yet to offer a cohesive package of programs that run over the Internet instead of from a PC. Ozzie gave little indication of what might be coming, or when. Meanwhile, Google has expanded beyond searches to offer free, Web-based programs similar to Microsoft’s mainstays, Word and Excel.

Ozzie said Word, Excel and other parts of Microsoft’s “Office” suite have weathered threats from both desktop and Web-based programs in part because competitors always compromised functionality. For example, he said, users always have to be connected to the Internet to use a Web-based word processor.

Instead of jumping belatedly into the fray with Web-only programs, he said Microsoft will pursue a mix of software loaded on PCs and Internet services that also work with the growing array of mobile devices, a strategy he called “software-plus-service.”

He said he sees free, Web-based, ad-supported software as a way to extend Microsoft Office’s reach, but gave no specifics. He noted that this solution…

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