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In Google Versus Apple, the FTC Makes Microsoft a Clear Winner

There are times that high tech coverage seems to have become all Google (GOOG) versus Apple (AAPL), all the time. Given the prominence of both companies and the multiple areas in which they compete, the attention is understandable. However, the clash of the titans has an interesting and unintended consequence. It has hand-delivered an advantage to Microsoft, an equal behemoth, by making it appear to regulators like an under dog.

Apple and Google are squared off in a number of market arenas:

  • online advertising
  • mobile operating systems (both smartphones and tablets)
  • electronic media sales
  • cloud services
  • application ecosystems
What has changed the market is the speed with which Apple has become a major player in all aspects of mobile. To see how different things have become, look at the Google plan to acquire mobile advertising service AdMob. The Federal Trade Commission actually cleared a deal that had raised expectations for painful review specifically because of what Apple was doing in mobile advertising:
"As a result of Apple's entry (into the market), AdMob's success to date on the iPhone platform is unlikely to be an accurate predictor of AdMob's competitive significance going forward, whether AdMob is owned by Google or not," the Commission's statement explains.
Apple was enough to keep Google, the dominant search advertising vendor and, over the last two years, an emergent display advertising power, according to an email from IDC analyst Karsten Weide, from anti-competitive hot water. Not only do the two compete in mobile ads, but are poised to overtake RIM (RIMM) in smartphone sales. That is still far from the volume of industry champ Nokia, but a significant development. Google is gearing up to take on Apple's iTunes and iBookstore. Google has a lead in cloud services. Both have robust platforms for mobile third parties.

Where is Microsoft in any of these areas? Trailing in ads. Trailing in mobile handsets. Non-existent in media sales. Amazingly, an underdog. The FTC has essentially handed the company a blank slate in these high growth areas. No US or EU regulators screaming monopoly. On one hand, Microsoft can do almost anything it would want (potentially even buy Twitter or Facebook) and, given its current online and mobile profile, no one could say a word. And in markets like mobile, it's not as though the industry has matured to such a degree that Microsoft hasn't a chance.

Microsoft does have a potential cultural problem. For years it's had to be skittish about antitrust charges. But Apple, Google, and the FTC have given the company a present. It can now paint virtually any action it takes as a third force to help diversity the market and prevent a duopoly that could too easily turn into a case of market mono. Maybe it's time to consider what not acquiring Yahoo leaves it free to purchase.

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