Why Google Scares Bill Gates

By Fred Vogelstein

"Today Google isn't just a hugely successful search engine; it has morphed into a software company and is emerging as a major threat to Microsoft's dominance. You can use Google software with any Internet browser to search the web and your desktop; send and store e-mail via Gmail; manage, edit, and send digital photographs; and, through Google's Blogger, create, post, and print formatted documents—all without applications from Microsoft.

While Google was launching those products—all of them free—Microsoft has been trying in vain to catch up in search. It has spent about $150 million on its search project, code-named Underdog. But Google and lately Yahoo keep leaping ahead with innovations like local-area search complete with maps and satellite photos, ways to search inside a video file, and search designed for cellphones.

Simply put, Google has become a new kind of foe, and that's what has Gates so riled. Since Google doesn't sell its search products, Microsoft can't muscle it out of the marketplace the way it did rivals like Netscape. But what really bothers Gates is that Google is gaining the ability to attack the very core of Microsoft's franchise—control over what users do first when they turn on their computers....