Will This Finally Take a Bite Out of Microsoft?

What do you do when you're outnumbered 250 to 1? Call in the Spartans.

The Wall Street Journal reports that Google (Nasdaq: GOOG  ) is preparing to introduce an app store not unlike Apple's (Nasdaq: AAPL  ) iTunes. However, this one's intended for add-ons or extensions to Google Apps -- its cloud-based alternative to Microsoft's (Nasdaq: MSFT  ) Office suite. 

The strategy makes sense. Office installments outnumber Google Apps installments 500 million to 2 million, the Journal reports. Recruiting developers to add to the suite, using the promise of incremental revenue as a lure, could make this contest a digital Battle of Thermopylae.

Of course, the trouble with this analogy (if you're a Google shareholder) is that the Greeks, led by a Spartan force of 300, eventually lost at Thermopylae. Google wants a win, not a valiant defeat. Too much revenue is at stake.

On the other hand, history has a way of handing victories to those who attract and keep developers. Witness Adobe Systems (Nasdaq: ADBE  ) and Red Hat (NYSE: RHT  ) , both of which have enjoyed generous support from coders over the years, as have Apple with the iPhone and Microsoft with Windows. In this case, sparkling new functionality in Google Apps could lead users to try the software inside their browsers, where The Big G can show them ads.

Of course this all assumes that the Journal report is correct and that Google is about to call in the Spartans. There's still a chance The Big G will choose to go it alone on development, but I hope it doesn't. Google needs as large a code-crunching horde as it can commandeer in order to make this a fair fight.

But that's my take. Now it's your turn to weigh in. Will developers help Google take a bite out of Microsoft Office? Or is Mr. Softy too entrenched in corporate America to be unseated? Make your voice heard using the comments box below.

Apple and Adobe are Motley Fool Stock Advisor selections. Google is a Motley Fool Rule Breakers recommendation. Microsoft is a Motley Fool Inside Value pick. Motley Fool Options has recommended a diagonal call position on Microsoft. Try any of our Foolish newsletter services free for 30 days.

Fool contributor Tim Beyers is a member of the Rule Breakers stock-picking team. He had stock and options positions in Apple and a stock position in Google at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. The Motley Fool is also on Twitter as @TheMotleyFool. The Fool's disclosure policy is both crunchy and delicious.


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Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On February 02, 2010, at 7:20 PM, WoodyDog1400 wrote:

    Google is only a threat to themselves. This is the start of the self destruction. They are trying to be everything to everyone. A little behind in that race... Stick with search engines and advertising. Leave the operating sys and cell phone to the others.

    Google reminds me of Yahoo 10 yrs ago.

  • Report this Comment On February 02, 2010, at 7:56 PM, FreeRange1 wrote:

    Agreed - they are trying to be everything to everyone losing focus in the process. The fragmentation of Android is a perfect example - so many flavors and implementations (software and hardware) that will totally confuse the marketplace and suppress its success.

  • Report this Comment On February 03, 2010, at 5:16 PM, akarren wrote:

    Google is fine, Google thinks long term and they understand that the Internet is the future. Microsoft is scared by that. If they weren't a legitimate threat, than Steve Jobs wouldn't have made such angry comments. Steve Jobs said to Adobe that the world is heading into HTML5, but with that comes a shift from mobile applications on the iPhone to Web applications, which Google is the best at. Hints Google putting Google Voice online when Apple wouldn't allow the Google Voice application. Apple can't beat Google at search, Google's search engine gives better results as more people query on it. Also in regards to Android, the tech industry is fractured and that is its strength. Look at Windows and its difficulty in other platforms besides the PC and laptop. Not doing so hot. Also I look to see Intel showing up Apple's sub par chip.

  • Report this Comment On February 05, 2010, at 2:23 PM, derekrv wrote:

    Google's got a long way to go to match what Microsoft provides with Word and Excel with their suite of offerings. The Google equivalents, while they offer reasonable functionality for small tasks, just don't have the capability to match what's available with Office.

    I'm not disparaging what's there - we use it in our business as well as personally, and (especially enhanced by the sharing features that Google Docs offers) it does the basics. For heavy hauling (macros, style sheets, rich page layout options), we have to use Office - the Google applications just don't have it.

    Given time, Google may catch up, or surpass, the Office suite, which is as bloated as it is powerful. It's interesting to watch......and I'll keep doing so.

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