This is a very good article on how Google can avoid Netscapes fate when it comes to competition with MSFT. Some of the things would be very worrying to me if I owned Google stock. They are the leader now but the 4 year 'Brain drain" where people leave when their options vest. And the idea of people taking their pet projects out on their own is the potential to be a problem down the road. But this is MSFTs hammer though:
Stanford's Mendelson, too, says integrating search into the next version of the Windows OS, Windows Vista, will be a key way Microsoft plans to win against Google, a fact that he's sure is not lost on the search engine company. Windows Vista is expected to ship toward the end of 2006.
"Microsoft has the advantage of integration... it's one they can build on," Mendelson says. "Desktop search will be a component of the next OS and it will be extended to the Internet. They're going to find a way that is legal to integrate it into the [OS], and it's a powerful advantage they have that Google will not have by virtue of their business model."
Yup when you can search using MSN.com via your desktop you avoid connecting to Google all together. All MSN.com needs to do is to make their search results nearly as good as Google and people may end up passing up the site (and even their IE browser) all together.
Thus advertising revenue will be worth more on MSN.com then on Google because they will reach the eyeballs of everyone that has Vista installed. This will crimp Google's revenue (the amount is subject on how good MSN search results are) and certainly hurt their growth. This move probably won't put Google out of business or anything but it will certainly tank that massive stock price though.
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