Saturday, May 19, 2007

Analysts: Microsoft's after Google's ad business

SAN FRANCISCO--Microsoft may be older and bigger than Google, but it's Microsoft nipping at Google's heels and not the other way around, according to two Gartner analysts who closely follow the moves of the companies.

By offering free Web-based productivity applications, Google is looking for an additional vehicle for advertising revenue and trying to distract Microsoft from focusing on its own core search advertising business rather than hoping to grab Microsoft's big corporate IT dollars, David Smith, a vice president and Gartner Fellow at research firm Gartner, said during a session at the Gartner Symposium ITXPO conference here on Wednesday.

Despite reports to the contrary, Google isn't going after Microsoft as much as Microsoft is gunning for Google, he said.

"Microsoft is clearly going after the advertising world" and has pledged to invest $2 billion to do so, he said. But he said the company is at a "critical point."