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From Microsoft To Google: Lessons On How To Lose And Keep Your Edge

Steve Ballmer at Windows 8 launch
Steve Ballmer at Windows 8 launch
Varinia Bernau

MUNICH - As a measure of Microsoft's hold over the technology-driven economy, one American tabloid once published a "Countdown to World Domination" calendar in the lead-up to the company's launch of its new operating system. That was nearly 12 years ago.

Today, we are living in a completely different era as the number of PC fans dwindles and nobody is exactly holding their breath for a new version of Windows. Is there anybody left out there who’s still scared of Microsoft?

Personal computer sales have been decreasing for years. And that’s not only a problem for the big PC makers: it’s also a problem for software giants like Microsoft, whose operating system Windows still runs on nine out of ten computers -- and guarantees the company a good third of its profits.

It is this very fact that has rendered the company sluggish. So sluggish in fact that in recent years it has either made half-hearted moves -- or simply slept through -- to react to new developments like Internet search engines, portable music players, digital books, and social networks.

That’s taking its toll now. If people aren’t buying PCs, then they’re not buying the software for them either. Ever more consumers are taking care of what they used to use a PC for on their smartphone or tablet. And they rarely use devices made by Microsoft. The company had to write off $900 million in the last quarter on surplus stock of its Surface tablets. It brought the model out only last October, more than two years after Apple launched its iPad. And then Surface didn’t sell, even at massively discounted prices.

Legacy and innovation

What Microsoft can still count on is their office products, notably Office with its Word, Excel, PowerPoint and other iconic programs that generated one-tenth higher turnover -- $19.9 billion – in the first quarter of this year. Still even those results were below analyst expectations.

Stock market players do not allow public companies time for breathers. Not even Google – the company that has largely inherited the role of world-dominating Bad Guy once held by Microsoft. And the Internet search giant founded more than 20 years after Microsoft manages to hold its position because it was able to migrate its core business of online ads from PCs to mobile devices.

Google developed a Windows counterpart: Android, a trim operating system that can also run on smaller devices. The company makes it available to many hardware manufacturers at no cost. Successfully. In Germany, Android now runs on 60% of all smartphones sold, while Microsoft’s mobile operating system runs on only 5%.

Worldwide, there are now more than 900 million active Android-powered devices, Google boss Larry Page bragged recently. Google is still earning most of its money from its search engine ads. Banners on Internet pages like the YouTube video platform that belongs to Google are ever-greater earners. The number of clicks on ads has risen significantly, although revenues per click decreased. One of the reasons for that is that many of these ads are being sold, at lower prices, for smaller smartphone displays.

What’s Google doing now? Spending money on development. Stock market speculators don’t like that either -- there were fewer profits from the markedly higher proceeds of $14.1 billion in the last quarter. So they sold Google shares. But that by no means should have anyone tossing away their Google calendars counting down to their World Domination.

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Geopolitics

Why Beijing Needs Ukraine To Lose

As the Chinese government puts together what it calls a peace plan for Ukraine, it's also considering sending weapons to Russia. The Biden administration warns China will "pay a real price" if it helps Russia, but Beijing's real goal is to weaken the United States.

Why Beijing Needs Ukraine To Lose
Oleksandr Demchenko

This article was updated on March 21, 2023 at 12:15 PM CST

-Analysis-

KYIV — In Moscow for his visit since the Russian invasion, Chinese President Xi Jinping is presenting himself as possible peacemaker to end the war in Ukraine. Ukrainian President Volodymyr Zelensky has said he is ready to talk with Xi in a bid to stop Beijing from supplying Moscow with weapons.

And yet China has no strategic interest in Ukraine winning the war. Why?

Xi's only priority is establishing a future world order on Beijing's own terms — and the defeat of Ukraine and its allies, particularly the United States, would create an opportunity for Beijing to absorb Taiwan and increase its influence in the Pacific.

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China is the main beneficiary of the full-scale war that Russia has unleashed against Ukraine, viewing the confrontation as a tool to weaken the West.

Like Russian President Vladimir Putin, Chinese authorities were convinced that Russian troops could capture Kyiv in three days and take control of most of Ukraine within a month. This is probably what Putin and Xi agreed when they met during the Beijing Olympics in Feb. 2022: the Russian leader promised to destroy Ukraine, weakening Europe and eroding the trust other democratic states had in the United States — and in exchange, the Chinese leader assured Putin that he would back Moscow.

Instead, what was hailed as "No. 2 army of the world" was forced to retreat. On Sept. 15, as Ukrainian forces were liberating the Kharkiv region, Putin met Xi in Samarkand, Uzbekistan. After returning to Moscow, Putin announced a partial mobilization.

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