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ECONOMICS REPORT - Microsoft, Google Take Aim at Each Other

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This is the VOA Special English Economics Report.

Google, the Internet search leader, will now offer a free operating system for personal computers. The company hopes to loosen Microsoft's hold on the market. Microsoft Windows is on more than ninety percent of PCs.

Google is basing the new product on its Chrome Web browser and the Linux open-source operating system. The Google Chrome OS is expected to be available in the second half of next year.

At first, it will be aimed at netbooks. These are smaller, simpler machines designed mainly for Internet use.

Google CEO Eric Schmidt, left, and Microsoft Chairman Bill Gates laughing together at a media conference in Idaho earlier this month
Google CEO Eric Schmidt, left, and Microsoft Chairman Bill Gates laughing together at a media conference in Idaho earlier this month

Google's chief executive, Eric Schmidt, says Chrome will pay for itself. It will do that, he says, by reducing the cost of computers and increasing the number of people who search the Internet. Google earns most of its money from sales of advertising on its search engine.

But the recession has hurt the advertising market. And now Microsoft has targeted Google's main business. Microsoft says its new Bing search engine offers a better way to search the Internet. Ads for it make fun of how Web searches often give people a lot of useless results.

COMMERCIAL: "Find a cure at bing.com. It's not just a search engine. It's the first-ever decision engine. From Microsoft."

A Web traffic report last Friday from StatCounter said Bing twice passed Yahoo in usage in the United States in its first few weeks. Yahoo is the second biggest search engine.

But no one has the answer to how much market share Bing will claim from Yahoo or Google in the long term. Microsoft, in its struggle against Google, tried unsuccessfully last year to buy Yahoo for more than forty billion dollars.

Google and Microsoft are also competing in business software. Google offers Google Docs. These applications are free and on the Web. They compete with Microsoft Office, a hugely popular product. Next year, Microsoft plans a new version of Office that is both Web-based and free.

Also, Microsoft plans to launch its seventh version of Windows this October. And the company is preparing to open its own stores, like its competitor Apple. In fact, some Microsoft stores could open right next to Apple stores in the coming months.

The recession has cut sales of PCs and software. But there may be hopeful signs for the industry. Intel is the leading maker of computer processors. This week Intel reported that its results for the past three months were better than expected. And it predicted more good news in the current quarter.

And that's the VOA Special English Economics Report, written by Mario Ritter. Transcripts and MP3s are at www.unsv.com. I'm Steve Ember.

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