Has Silicon Valley Lost Its Edge?

Take Google, for example. Almost everybody in tech (and a lot of other industries) has burned with envy about that company for most of this decade now. The media world believes it was played for a sucker early on by giving Google the keys to its advertising business ... and never giving them back. Other companies in the search business are cross-eyed with resentment that Google quickly raced to a lock on the business and has never let it go. And everybody else in tech hates Google because it is just so damn successful … and so cocky about it.

Six months ago, it looked like Google could go on owning its market forever, with scarcely a contender in sight. Now they seem to be popping up everywhere. First there was Stephen Wolfram's Alpha, which wasn't quite the pure search engine it was predicted to be, but, nevertheless, a very intriguing (and perhaps influential) new way of thinking about the search paradigm.

Then, seemingly out of the blue, decadent old Microsoft managed to rise from its gilded couch and rediscover a kind a second youth with its introduction of its own new search engine: Bing. And Bing isn't just another classic Microsoft me-too product; it's really pretty good. In fact, it could even be better than Google. Try it, you'll be impressed.

So, suddenly now, Google, apparently so secure in its position, is getting a serious assault in its core business. And that's just the beginning, because Google's real business strategy has always been to control the flow of information on the Web. It has been a brilliant strategy, but now it too is under assault.

That challenge is coming from Twitter. Even a couple years ago, Twitter wasn't much more than a cult product, a novel little Web app used by a few thousand insiders. Well, I don't have to tell you what has happened in the past six months. Twitter, it goes without saying, is the hottest tech company in the world right now. And its story is just beginning.

Won't Be Easy Catching Apple

But what has been scarcely noticed by the general public, although striking fear into the heart of both Google and Facebook, is that Twitter represents both a new kind of social network and a new information stream that neither of those giant firms can get their hands around. That's why Google's Eric Schmidt is publicly bad-mouthing Twitter even as he ponders buying it, and Facebook's Mark Zuckerberg is racing to put Twitter-like functions on his site. But, in yet another irony, it's now Twitter's turn to have a lock on its market.

But don't cry for Google. Because even as it is being challenged in its core business, the company is racing to attack other historic technology locks on two new fronts.

The two greatest locks in the high-tech world are the Microsoft Windows operating system and the Microsoft Internet Explorer Web browser. Except for some niche products (the Apple OS and Firefox, for example) that sometimes seem to exist only as the not-Microsoft products, Microsoft has essentially owned these giant businesses for decades now. They have made the company (and its founders) hugely rich in the process, and are about as close as you can get to a permanent monopoly in the tech world. And, yet, even these locks are being picked, this time by Google.

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