Somewhere along the line Google got left behind by Apple. Profits in its latest quarter were up 25 per cent, and came in at $1.84bn. Impressive? Yes, of course it is impressive, but not so long ago Apple and Google were neck and neck in the profit stakes.

Ironically, Google is strong in precisely the areas where Apple is weak. Open systems are fast becoming to define who Google is. So it embraces Linux, and goes to great lengths to try and persuade as many hardware companies as possible to produce Android compatible phones.

So far it has been losing the battle with Apple. The success of the iPad only goes to emphasise this.

Even so, the iPhone 4 debacle illustrates why Google may yet prove to be the winner. Apple is reliant on its in-house hardware design expertise. It is reliant on its brilliant designers continuously coming up with wonder products. Google, by contrast, can benefit from the expertise of other hardware companies.

Google can benefit from hardware evolution. Evolution is supported by two pillars: variety and failure. Nature experiments with lots of adaptations and changes, most of which fail, leaving one winner. There may be only one species of human alive today, but over the course of the last few million years we have had many cousins which were not our direct ancestors, and which fell extinct. Apple is just one company, and cannot afford many hardware failures.

Google, by contrast, can thrive on the back of the failures of a host of companies that ultimately support its software.

The threat to Google comes from three directions. First, the likes of Rupert Murdoch and Microsoft don’t like it. If it is shut out from content, then this could cause the company a big blow. There was a rumour not so long ago that Microsoft was paying media companies to exclude themselves from Google News. Rupert Murdoch’s ideas for charging for content pose a threat to Google. But in the long run we suspect Google will be the victor and Murdoch the loser. For every media company that tries to exclude itself from the Google family, another one will be formed. Besides, Murdoch has probably underestimated the importance of user generated content.

Google’s second threat lies with regulators, and any possible antitrust suit that may be brought against it. This potentially is a very real problem for the company.

The third weakness lies in the danger that a couple of bright programmers may come across a superior search engine algorithm.

Nothing lasts for ever, and one day Google will be toppled. We suspect its undoing will be a combination of the last two circumstances described above.

YaWho?

Yahoo was one of Google’s early backers. The day the company chose to sever links with Google was a bad day for Yahoo.

Yahoo’s profits came in at $213m, compared with $151m a year ago. Even so, markets had hoped for more.

Yahoo’s problem is that it is a jack of all trades, but master of none. It has become just another computer company, producing lots of content that says nothing really meaningful.

Still, it has done well to survive. About three years ago we headlined here: “In a few years’ time we will be asking YaWho?” It has proven our prediction to be wrong so far, and well done for that.

The question is, however, what next for the techs

See The end of desktops

For all today’s articles in this series

See Company results season, wealth creators score hat trick against wealth destroyers

Google, too, sees profits leap and Ya Who?

The end of desktops

While techs boom, banks may be returning to crisis