And depressing as this may be, I think you’re right: Google does seem to be showing some signs of loosing the edge.

I keep hoping for one company somewhere to show that it needn’t be that way.

Adam: The Operating System is beginning to matter less and less. I’m not sure businesses will automatically pick up Vista like they have all previous Windows versions.

I talked to the IT architect of one of Denmarks largest organizations and he wasn’t sure they would go to Vista at all. And then there’s the news that IBM will go with Linux on the desktop. Plus of course online apps which require no particular OS.

It seems even MS is wising up to this and are redefining their strategy to a world where the OS doesn’t matter.

The big things that M has that Google and Yahoo! can’t touch is the dominant operating system and the dominant internet browser. Considering around 90% of people use Windows and IE, they will have an immense impact with their new OS and with IE7. If they can build Live and other new technologies into those two things they have a huge opportunity to take market share from G.

1) The odds are stacked against any “big” company innovating and adapting. That’s one big reason they buy small companies. “Big is a bad bet like being overweight is a bad bet.”

2a) Will preoccupation with revenue hinder innovation? Absolutely. Some of the history at Microsoft (I’ve got a great case example) illustrates why.

2b) You write “Google can slap something together”… and get fast feedback. Not so fast. Google “could” do that but that’s in the past. To cut and paste the past on top of the future is another sucker’s bet. Organizations don’t move in a ballistic pattern. It’s more complex and dynamic. Remember “regression to the mean” affects organizations too.

3) Talent dilution is a great point. Most big companies folow the “do this and you’ll get that” formula for incentives. Again a bad bet especially when stock options stop growing geometrically.

There are fixes for big companies to stay fast but there is also a lot of momentum “against” the disciplines (and don’t forget the attack of the Cave people) http://www.businessinnovationinsider.com/2006/03/wrapup_laurence_haughtons_art.php.

But Google’s turn to face the music is coming. They’re showing signs too!

I have three major questions.

First: Can Microsoft innovate as well as Google, Yahoo and others?

Secondly: Will Ms’s very preoccupation with revenue (a business asset in most cases) hinder their innovation? Google can slap something together, release it in beta and get customer feedback immediately.

Additionally, I see some beginning rumblings from Ms staff. Salaries have been stagnant, their no longer leading tech-wise and Google is THE employer of choice for techies. Will we see a dilution of talent? Ultimately it comes down to attracting/retaining the best people and get the most out of them, and Ms seem to be losing their edge here.