You have heard it before, probably during the late 90’s from an open source proponent or a Netscape executive, Microsoft is on the way out.  Microsoft will loom large in the market for PC’s indefinitely, but growth in the PC market is shrinking.  A graph of PC sales over the last twenty three years illustrates this.  We have not reached the peak in terms of the number of PC’s sold, but a scan of the growth rates indicates a decline.  The mix of PC products consumed is also experiencing a significant shift towards smaller, cheaper machines.  This shift in the types of products sold, which is caused by shifts in consumer tastes, combined with smaller growth rates will ultimately lead to a significant reduction in Microsoft’s dominance.

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Google’s mission is to, “organize the world’s information and make it universally accessible and useful.”  That’s all well and good, but someone has to foot the bill.  Currently, the advertisers of the world are footing the bill.  Google places ads on its search engine results and on a network of sites.  When a web surfer (which mistakenly implies physical exertion) clicks on a link in an ad, the advertiser pays an agreed upon “cost per click.”  In 2007 65% of its ad revenue came from clicks on Google.com and 35% came from its network of sites (from Google Investor Relations).  What are advertisers really paying for and what is Google providing?  Web traffic rerouting. [Read more →]