Why is Microsoft (MSFT) so concerned about Google? (GOOG) Lots of reasons, one of which is this: By this time next year, Google’s search business will be larger and more profitable than the most profitable and legendary monopoly in history–Microsoft Windows. (Just Google’s search business–that doesn’t even include AdSense).

Before we go to the numbers, a few important observations.

• Both products are natural monopolies. Google’s share of the search market should continue to approach Microsoft’s share of the operating system market (90%+)
• Both products are wildly, fantastically profitable. Microsoft’s Windows business has operating margins of 75%-plus. So does Google’s search business (once you factor out the billions Google is spending on products that produce zero revenue).
• Google natural monopoly is growing a lot faster than Microsoft’s. Google’s search business should be bigger than Microsoft’s Windows business by early next year (at the latest). Google is also growing faster than Microsoft’s two monopolies combined–Windows and Office. Google has yet to develop a second huge, fantastically profitable monopoly–the Office equivalent–but AdSense is getting there.

Read the full article Source: Silicon Alley Insider

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