When Google (Nasdaq: GOOG) announced it had launched Google Music this week, I couldn't help but draw parallels to Microsoft (Nasdaq: MSFT) entering the music business with the Zune a few years ago.
The similarities are uncanny between Google and Microsoft at similar phases in their development. Microsoft played an integral role in making PCs universally adopted and consistent from a variety of manufacturers with Windows. Google brought the Internet to a new level with its search engine and AdSense. But with these businesses spitting off cash, and their dominant positions in place, they needed to expand into other businesses.
After destroying Netscape, Microsoft went after Google and Yahoo! (Nasdaq: YHOO) in the search space, got into video games after Sony (NYSE: SNE), followed Apple (Nasdaq: AAPL) into music players, and came to the mobile phone market after almost everyone else.
Along the way, Microsoft went from a company with amazing products for everyone to a company many of us avoid at all cost. Microsoft became so big that it needed to mimic other company's products to grow its business, and the muscle it used in the process and the uninspired products it created turn me off from the company. I'm afraid I'm seeing Google doing the same thing now.
Microsoft 2.0
It's sad to see that Google is slowly becoming the same type of company as Microsoft, and the Google Music platform was the icing on the cake in my mind. It's a rip-off of Apple's iCloud and iTunes with some minor tweaks. But this isn't really new if we think about the markets Google has tried to enter after dominating search.
Google swung at Microsoft Suite with Google Docs, it tried to copy eBay's (Nasdaq: EBAY) Paypal with Google Checkout, it entered the browser competition with Chrome, its Android tried to go after Apple, and recently Google+ made a play at Facebook's social media domination. The only great success in that list is Android, which has managed to take a large portion of the mobile market but doesn't make Google a significant amount of money.
Microsoft repeated
This is an important parallel because Microsoft has become the butt of jokes in the tech industry despite its dominant market position. It's no longer a revered company like Apple or Google are, and I see Google heading down that same path. It's put its hands in too many pockets and hasn't created inspiring new products.
A decade from now I hope I'm not trying to avoid Google products like I do with Microsoft. A transition away from Google would be much easier, something investors should keep in mind when looking at Google.
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