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Originally published Monday, January 2, 2006 at 12:00 AM

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E-conomy

Microsoft vs. Google

It's easy to tell who's the No. 1 high-tech company at any given time. It's the one everybody seems to fear and hate. It happened with Xerox...

Special to The Seattle Times

It's easy to tell who's the No. 1 high-tech company at any given time. It's the one everybody seems to fear and hate.

It happened with Xerox, IBM, Microsoft and to some extent Intel. None is as dominant as it once was, in part due to antitrust strictures, but also a changing landscape. Instead, a new bogeyman is spooking the corridors of 2006: Google. With a searingly hot stock and a portfolio bursting with world-changing ideas, Google inspires the awe and dread that inevitably accompany the mantle of No. 1.

The bogeyman feeds some intrinsic need for tech denizens to target an enemy. Call it Borg Love: Resistance is futile, we will be assimilated, but we really need you to motivate us!

From the late 1980s through the turn of the century, Microsoft epitomized the Borg complex. But if any one shift marked 2005 in the technology world, it's that Borg changed brands.

By any portfolio measure except one, Microsoft is still the elephant in the doorway. Its head count, revenue, profits and product lineup dwarf Google's and will for some time.

But there's that growth thing. Like a wet-eared Internet qualifier at the World Series of Poker, Google keeps doubling up, while onetime Harvard poker great (and dropout) Bill Gates nurses his stack.

Google is building from a much smaller base, of course. But growth has a way of feeding innovation, and vice versa.

Unfortunately for Microsoft, the cycle also works in reverse. Slower growth has a way of inducing lethargy and vice versa.

Can Microsoft get its groove back? If any year holds the promise, it's 2006. Windows and Office upgrades, Xbox's strong initial showing and a host of vaguely referenced new products suggest a banner year.

But the question doesn't seem to fire up tech folk nearly as much as how far Google can go. As one wag put it, some day we'll all Google our Googles as we Google to Google.

Microsoft can draw encouragement from two perceptions. First is the sense the Redmond gang represents the only real hope for curbing Google hegemony in the broadband-driven world known as Web 2.0.

Second, the words "Google" and "monopoly" are starting to be whispered in the same breath. In a market so amorphous, it may seem ludicrous to think one company could exert exclusionary force.

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But that's what they said about the PC business in late 1989, when federal investigators first looked into possible antitrust activity by a nascent Redmond company.

In its defense, Google might point to Microsoft CEO Steve Ballmer's September vow in BusinessWeek: "We won the desktop. We won the server. We will win the Web."

Faced with having to choose a monopolist, tech minions may spend 2006 hoping Microsoft and Google focus their energy on each other, leaving the little guys free to do real innovation.

Seattle freelance writer Paul Andrews has written about technology for more than two decades. He can be reached at pandrews@seattletimes.com.

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