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How Google became Microsoft: A decade of hits, misses and gaffes

The Noughties weren't always nice

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The new Microsoft of the decade: Google

It took Microsoft 20 years to shift from technology David challenging tech giants to opaque corporate entity of dark and unclear motives that screwed partners and the competition. Google achieved that in half the time.

In the 1990s, Microsoft sullied the good name that it had started building in the 1970s by forcing OEMs to ship IE to kill Netscape and by closing down small rivals by launching its own versions of their software and then charging low or no price. And there were the apparent invasions of privacy, with Windows supposedly spying on users and reporting back to Redmond.

By the beginning of the Noughties, Microsoft had been put in its place. Judge Jackson's findings of fact came down in September 2000, and the settlement came in November 2001.

In 2000, Google was a two-year-old start-up that dug out information better than its bigger rivals, had a cheery "don't be evil" mantra, let employees devote time to pet projects, and rolled out one free application after another.

Now it's the internet's single largest search and advertising company. Google is the Goliath. As such, people are asking what such a massive company does with the information we surrender each day when we search, send emails, compile spreadsheets and upload videos.

Just this month, Google announced its own DNS service.

And with the company controlling 70 per cent of the search market, many are questioning whether an antitrust investigation is in order. Google will tell you that advertisers set the prices on its search ad system, but the reality is much more complicated, with Google-controlled algorithms deciding when and where ads are posted and how much is charged. The reality is that the AdWords is a black box knowable only by Google.

Much the same goes for the company's "organic" search algorithms. Google tweaks its algorithms with sweeping consequences that shape traffic flow and make Google a choke point for the majority of online ad dollars and traffic.

For open-source partner Mozilla, meanwhile, it delivered a solid slap in the face: Having put code into Mozilla for Firefox and provided more than 85 per cent of Mozilla's cash, Google decided to go its own way with Chrome, raising questions about the future of Firefox and Mozilla's funding.

Throughout it all, the company that's slowly creeping into more spheres of daily life and the web has been aloof and unaccountable. It has dismissed privacy concerns with the conviction of a committed Tory saying anyone who has a problem with intrusion online must have something to hide. And it sees no problem with laying claim to more of the world's data simply so it can sell us more ads.

Kleptomaniac of the decade: Oracle

Oracle bought eight companies between 1994 and 2004. During the last four years it gobbled up 56 - or their technologies. Targets ranged from mighty competitors that alpha-CEO Larry Ellison had toyed with - BEA, PeopleSoft and Siebel - to niche specialists as Oracle expanded its market share and rounded out its stack.

You can expect more M&A next decade: number 57 - Sun - is already hanging and acquisitions drive Oracle's growth in what's a stable and saturated market. Ellison in 2006 committed Oracle to achieving 20 per cent earnings annual growth until 2010. It claimed a number closer to 30 per cent at the end of its fiscal 2007.

Executives set out a new goal in October: to more than double revenue in the next five years and grow earnings per share by 20 per cent. Each deal followed an orderly and predictable process of interviews and Oracle cutting the fat. Oracle wasn't precious either, spiking its own technologies if it bought something better - as with BEA's WebLogic at the expense of its own application server. Price hikes accompanied purchases - 47 per cent in BEA's case. Ellison's eloquent defense: take it or leave it.

Having bought most of the competition, the question is: where does Oracle go next? Ever the risk-taker, and having nailed software deals, Oracle clearly felt it was up to the challenge of buying a hardware and software company, if only for the software. That company is Sun.

But Ellison likes his independence. One thing he hates more than being beholden to Microsoft and Windows is being beholden to IBM and its Global Services. Expect Ellison to look at buying into services: He's got the stack and the apps already. That is, if his company doesn't choke on the challenge of assimilating and turning around Sun's business.

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