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Insight Focus Google's man behind the curtain  Google's hard bargain |
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The Mountain View, Calif.-based company is reportedly preparing to release downloadable software that enables people to search for text and files stored on their computer's hard drive. The move would dramatically expand Google's search business beyond the Web while taking direct aim at Microsoft, which is itself getting ready to take on Google's dominance in Web search with its own technology.
"It's clearly a pre-emptive move," said Richard DeSilva, a senior associate partner at venture firm Highland Capital.
Although Google would not confirm the existence of the project, called "Puffin," industry watchers have expected such a move for some time. Having announced plans last month for a US$2.7 billion initial public offering of its stock, Google is accelerating efforts to increase revenue and expand into new markets on a number of fronts.
By broadening into desktop file search, Google would put two businesses to the test. First, it would expand its Web-search advertising -- its primary source of revenue, with sales of $914 million last year -- to an ad-supported application running on the desktop. That would put Google much closer to controversial companies such as Claria (formerly Gator) and WhenU, which have been caught up in a growing consumer backlash against "adware" and "spyware" products.
Second, Google would take what it's learnt in building an enterprise search application and bring it to the masses. That's no easy task, considering that Google failed to storm the enterprise search market when it introduced the Google Search Appliance in September 2002. The product makes up a fraction of its business.
The Microsoft factor
But desktop file search poses vastly different problems than Web search does, and the company could easily be trumped by operating system makers such as Microsoft, whose Windows software runs on more than 90 percent of the world's PCs.
Microsoft's OS dominance has been credited in the past with helping the software giant muscle into fresh territory by bundling new features in Windows -- a key allegation the US Department of Justice's anti-trust suit, filed against the company in October 1997.
In a Securities and Exchange Commission filing announcing its IPO, Google flagged potential Microsoft tactics as a possible threat to its business on the Web. In an overview of risk factors facing the company, Google speculated that the software giant could one day seek to interfere with its ability to index certain kinds of documents on the Web.
Such concerns are even more pertinent when it comes to the desktop, where Microsoft holds powerful levers to promote its own products over those of rivals.
