Q: How large is Microsoft’s competitive disadvantage

in Internet search and search related advertising in

2008? If the industry remains on its current trajectory,
how will Microsoft’s disadvantage evolve over time?
A: Microsoft has a very large competitive
disadvantage in the Internet search and search related
advertising business. As of November 2008 Microsoft
had a market share of 8.3%. Google, in the same
month, had a market share of 63.5%. Google had also
Microsoft case twice as many engineers as Microsoft and 15 data-
centers in comparison to Microsoft’s 4 data-centers.
Microsoft’s disadvantage in the internet search
business will increase over time as their market share
has been declining in the past couple years. This trend
will probably continue in the near future as Microsoft
haven’t been able to scale up their organization or find
a breakthrough that will give them a competitive edge
over Google.