One of the advantages of being the richest man in the world is that people tend to laugh at your jokes.
Once asked about the threat to his business posed by Google, Bill Gates said: “I hear they’re coming out with a robot that will cook hamburgers, too. Let’s spread that rumour – there’s nothing they can’t do.”
That was at the consumer electronics show, back in January 2006. His quip was followed by much merriment. But here’s your challenge: you try the same joke, bet you don’t get any laughs.
Anyway, yesterday Google didn’t so much announce a new machine for making hamburgers, but even so, it could mean the end of the gravy train at Microsoft – not straight away of course, but the computer world equivalent of Big Macs, Microsoft Windows, could be heading to get fried.
The big announcement is that Google is planning to release its own operating system – called Google Chrome OS.
It’s Linux based system – with a bit of Google stuff chucked on the end. This means, of course, it will presumably be free.
It is a tough one for Microsoft. Its business model has been based on charging for its software. How can you compete against free software?
Nothing lasts for ever. At the beginning of the last century, the economist Alfred Marshall drew up a list of the top 100 companies. So large and powerful were the companies on Marshall’s list, he argued that they would probably survive indefinitely. He referred to them as the Californian Redwoods – trees that can live for so long that to us humans, with our short lifespan, they practically appear immortal. Redwoods have in fact been known to live for over 2,000 years.
But in 1999, the economist Richard L Hannah revisited the Marshall list, and discovered that of the 100 largest firms in 1912, 29 had, by the time of the study, gone bankrupt; 48 had disappeared; and just 19 of them were still in the US top 100.
Will Microsoft yet prove to be another example, to follow Lehman and GM, of how the seemingly invincible can quite suddenly look all too vulnerable.
PS If Google does finally emerge as the dominant player, it is a tough one for regulators too. Can you really fine a company for being anti competitive when all its products are free?
© Investment & Business News 2013