Microsoft has countered with a dramatic overhaul of the Windows operating system, one designed to bring tablet features such as touch screens to desktops and laptops. But Windows 8 has gotten off to a tepid start since its October release.
The changing fortunes of Microsoft and Google have been reflected in the stock market’s appraisal of the two companies.
Google’s market value has soared from nearly $25 billion at the time of its initial public offering to $255 billion. Microsoft’s market value has fallen by about 20 percent during the same period, declining from nearly $300 billion at the time of Google’s IPO to $239 billion today. Apple Inc. (NASDAQ:AAPL), a rival of both Google and Microsoft, is the only technology company worth more than Google Inc (NASDAQ:GOOG), with a market value hovering around $400 billion.
In morning trading Tuesday, after the latest campaign kicked off, Microsoft’s stock gained 36 cents, or 1.3 percent, to $28.95, while Google’s increased $6.85, or nearly 1 percent, to $781.70.
Microsoft developed its anti-Google ad campaigns shortly after hiring former political operative Mark Penn in August as a corporate strategist who reports directly to Ballmer. Penn is best known as a former pollster for President Bill Clinton and a campaign strategist for Hillary Clinton’s unsuccessful bid for president in 2008. Penn left his job as CEO of public relations firm Burson-Marsteller to help Microsoft generate more usage of its Bing search engine and other online services.
Microsoft isn’t saying how much it is spending on these ad campaigns beyond saying the amount will run in the “multimillions” of dollars.
Although there isn’t any evidence that the ads have hurt Google yet, Sullivan said Microsoft is pleased with the response. The company says about 117,000 people have signed Microsoft’s online petition protesting Gmail’s ad-driving scanning of content. That’s a sliver of the more than 425 million Gmail accounts worldwide. Microsoft says about 4 million people have visited Scroogled.com, the website that serves as the hub of the company’s anti-Google screed.
Although the attack ads are something new for Microsoft Corporation (NASDAQ:MSFT), denigrating the competition isn’t. Most notably, Microsoft tried to undermine Web browser pioneer Netscape Communications beginning in the mid-1990s. Most of that sniping remained behind the scenes until a U.S. Department of Justice investigation into Microsoft’s business practices exposed the cut-throat tactics deployed to overcome Netscape’s early lead in the Web browser market.
Given that history, Microsoft’s marketing assault on Google isn’t that surprising, said Cusumano, who has been following the company for 20 years.
“Nothing is below Microsoft,” Cusumano said. “They have been playing dirty for a long time. In this instance, they probably sincerely believe this can give them a little marketing edge and help them capitalize on the growing discomfort with the size and influence of Google.”
The article Microsoft Escalates Advertising Assault on Google originally appeared on Fool.com.
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