The Clash of the (Internet) Titans

There's a lot going on with Internet giants Microsoft and Google, and the potential consequences are huge.

First, last Wednesday, Microsoft beat out Google in a competition to win a stake in Facebook. Microsoft announced it's going to buy a 1.6% stake in the social networking site. Microsoft will pay $240 million in a deal that values Facebook, which is not publicly traded, at a staggering $15 billion.

If you're not familiar with Facebook, go here to read my post of June 29th.

The Wall Street Journal said this:

The deal is rooted in an online-advertising boom that has turned Facebook into the newest Internet darling. In recent years, advertisers...that once focused their spending on TV, newspapers and other traditional media have started shifting their spending to a host of Web sites. Google has built its fortunes on that shift, and others including Microsoft are rushing in. Behind the deal also are concerns at Microsoft that social-networking sites such as Facebook might one day become the central window consumers use to access the Web.

Google didn't wait long to respond to Microsoft's victory. Yesterday's Wall Street Journal reported that Google is going to release "a set of technical specifications software developers can use to write Web-based applications that run within a number of different social-network services and also tap into user information."

Google announced twelve partners for its OpenSocial specifications. Are you surprised that Facebook, who had spurned Google, and MySpace (owned by media giant News Corp.) were not among them?

Here are are a few of the lucky twelve: Hi5 Networks Inc., LinkedIn Corp., Ning Inc., and Friendster Inc. Salesforce.com Inc. and Oracle Corp, which sell software and Web-based services were also named as partners even though they are not social networking sites per se.

Google says it is releasing Open Social to make it easier for developers to write applications that work across different social networks and avoid fragmentation of an important, growing part of the Web. (WSJ)

The Associated Press (AP) said yesterday that "Google hopes to build a one-stop shop for software developers who create tools [called widgets] that make it easier to share music, pictures, video and other personal interest on social networking sites...Facebook now hosts more than 8,000 widgets..."

The AP is blunt: "While Google muscles into the social networking scene, Facebook appears to be gearing up to grab some of the advertising revenue that has been pouring into Google. Facebook is expected to discuss its plans for its own advertising network during a Nov. 6 event scheduled in New York."

But, wait, like the old Popeil commercials, there's more...

Yesterday's Los Angeles Times reported that Google is in talks with Verizon Wireless and Sprint Nextel Corp. about "carrying a cellphone powered by the Web company's software...Deals with Verizon Wireless and Sprint, the country's second- and third-largest carriers, would give Google a wide platform for its software."

There have been reports and rumors about an upcoming Google phone for a long time. The company had admitted it planned to bid in upcoming FCC auctions for a piece of the wireless spectrum. The LA Times story points out that Google could cut years out of the process and jump into the business immediately by simply making deals with the major wireless carriers.

Tuesday's Wall Street Journal also carried a story on a Google phone:

In recent months Google has approached several U.S. and foreign handset manufacturers about the idea of building phones tailored to Google software, with Taiwan's HTC Corp. and South Korea's LG Electronics Inc. mentioned in the industry as potential contenders...The Google-powered phones are expected to wrap together several Google applications--among them, its search engine, Google Maps, YouTube and Gmail email...The most radical element of the plan, though, is Google's push to make the phones' software "open" right down to the operating system...That means independent software developers would get access to the tools they need to build additional phone features.

The world, it is a-changin'