I do not think we can reach a reasonable conclusion on a single all-or-nothing position. In many respects both Microsoft and Google are natural monopolies, given the advantages to consumers of having a dominant standard and of being first to market.
In operating systems, Windows is what most people used first when they started computing. Most of us are familiar with it and it works quite well. Apple's operating system is not really relevant, an expensive niche product without the large number of add-ons, many free. Google has now offered an alternative in the form of cloud computing and the Chrome OS. This follows up on its relationship with Mozilla and the Firefox browser and opens an alternative to computer makers, a market for cheap simple computers like the netbook whose sales have been surprisingly good. (HP announced today that its Compaq division will soon offer a basic full size laptop for $298.) Chrome will prosper or not depending on the software that becomes available. By giving the software away, Google really puts pressure on Microsoft. Whether Microsoft can come up with an equally good, fast, down-sized modification of Windows and free software will determine its position in this market. Even if it does, the home computer market will become a duopoly but the advantages of being the standard OS are very high. I tend to go with Google.
The second big competitive area is search. Google's has come to dominate, its quality having stayed consistently ahead of the competition. Microsoft is trying, as well as a number of other search services. Microsoft has worked out a 10-year partnership with Yahoo on search, but for the time being, Google effectively has a monopoly based on quality, tempered by the fact that innovative competition continues to put pressure on Google.
Book scanning is unique in that Google is all by itself for now, although others would like to enter the business. The proposed settlement with copyright holders is problematic. It looks as if others will have difficulty entering, if they have to negotiate licensing arrangements with the copyright holders or buy into a deal similar to what Google has worked out. In other words, the Google deal will be a monopoly with no visible alternative, unless the court forces a major change in terms.
A business we don't normally think of as separate is the server farms that Google has developed. They make possible much of what Google does--indeed, it becomes the cloud in cloud computing. Its technology appears to be leading-edge. When it owns the infrastructure, it is tough to compete with.
Vogelstein begins his article, alluding to the speech of Christine Varney several years ago in which she says that "For me, Microsoft is so last century.... They are not the problem. I think we are going to continually see a problem, potentially, with Google." Varney has now been appointed head of the Justice Department's antitrust division, making her the government's most powerful anti-monopoly prosecutor and in a position to do something about Google. Google will need to watch its behavior to avoid retribution. Watchful waiting may not be a bad solution in a market with two large and highly competitive players, as well as a lot of small ones. It still seems to be producing a rapid stream of innovation.
