Apple, Google gains: shades of Microsoft

Year after year, the biggest technology trends are the ones no one predicts. So quickly does the field change that a blip on the radar can turn overnight into the asteroid that leveled Las Vegas.

Who would have thought a year ago that 2004 would close with Apple Computer and Google as the hottest companies around, while longtime Goliath Microsoft was enduring the humiliation of cross-examination by disenchanted shareholders?

The answer has to do with innovation. Apple's iPod and Google's ads have proved themselves by being smarter, better designed and more useful than anything the competition can produce.

The simplicity of the iPod and its ease of use have made it the one must-have device this year. Among my circle of friends, half a dozen iPods found their way under the Christmas tree.

Google broke the mold of obnoxious banner ads. Instead, unobtrusive text ads, paired with Google's intuitive search results, proved a comfortable fit for Web surfers.

But investors rewarded Apple and Google because both are building success the way Microsoft once did — via platforms. How far they can extend their platforms, and whether Microsoft can hop aboard and seize the pilot's wheel, are the big questions of 2005.

If all Apple does is sell another 5 million to 10 million iPods, shareholders will be happy. But the run-up has to level off. Then it will become a matter of adding capabilities — in-dash automobile mounts and satellite radio look like good starting points. Video may come along as well.

Google will have to continue sharpening and broadening its search capabilities. Countless possibilities exist, the main qualifier having to do with competition from Yahoo!, Amazon.com and the as-yet undiscovered powerhouse.

And so we come back to Microsoft.

Restless shareholders questioning Microsoft's strategy at its annual meeting in November were really asking: What happened to the old Microsoft way of "innovating"?

Faced with an iPod boom in the past, the old Microsoft would have called together hardware makers for a global announcement of "WinPod," a new, cheaper, Windows-reliant MP3 player in versions from Lexar, Hewlett-Packard, Samsung and on down the line.

As for Google, the Microsoft of old would have unveiled Wingle, a search service that combined results from a Windows PC with Web searches while at the same time making Google searches curiously slow and garbled.

Instead, Apple "iPodded" Windows by adapting its iTunes technology to PCs and did a big HP deal. And Google beat Microsoft to market with a desktop search tool.

Queried about its fumbled response to market, Microsoft denies that antitrust has anything to do with it. Microsoft partisans might wish it did. The thought that, unfettered by legal concerns, the software giant still can't come up with a compelling strategy provides little balm for investor upset.

In reality, antitrust is a huge factor. Early Microsofties snickered at IBM's legal wariness over platform extension, a timidity that in part kept Big Blue from "locking up" the original PC by developing its own DOS (rather than licensing it from a tiny Bellevue company).

If I had to guess, I'd say 2005's bolt out of the blue will have to do with content-sharing of some sort. Like search with Google and music with Apple, file-sharing is a field ripe for platform development once someone figures out the appropriate business model.

The irony would be if Microsoft started doing things the way the old Microsoft did them. How weird it would be to be writing this time next year about the unforeseen reawakening of the slumbering giant, just as even loyal shareholders were beginning to harbor doubts.

Paul Andrews is a freelance technology writer and co-author of "Gates." He can be reached at pandrews@seattletimes.com.