Two stories came out today that seem to hint at the current state of the rivalry between Google and Microsoft. But they’re somewhat contradictory..
First, reports that Google and Microsoft have decided to play nice, collaborating to set up what amounts to an incubator for Internet entrepreneurs at UC Berkeley. The companies have donated a total $7.5 million dollars, which will be doled out over the course of 5 years to fund the development of new, revolutionary Web applications. It gives me a warm fuzzy to see two of the biggest companies in the industry partnering for the greater good.
On the other hand: In more proof that distribution is king in the world of search, word leaked today in the Journal (registration required) that Google and Time Warner are approaching terms on an exclusive advertising distribution partnership on AOL. While Time Warner officially took the ‘For Sale’ sign off AOL a few weeks ago, Microsoft has apparently been pitching them hard on replacing Google ads with AdCenter results. No matter how powerful Microsoft’s new targeting options are, they’re sunk without a way to improve the footprint of their network and gain a critical mass of distribution. What was already a tight two way battle between Google and Yahoo! is about to get even tighter.
