Google's Microsoft strategy: death by a thousand Gmail links
Google's reading your e-mail - and doing some really smart, helpful things in the process. First it inserted links to Google Maps in users' Gmail accounts: Put anything that looks like an address in an e-mail, and Google automatically added a link to that location. Then came the ability to add an e-mail invitation to your Google Calendar. Now Google is offering to open Microsoft Excel attachments in Google Spreadsheets, Google Blogoscoped reports.
There's nothing nefarious about this, of course. Google's not blocking you from adding events to Outlook or opening files in Excel. But it's becoming easier and easier to stay in Google's Web orbit, and harder and harder to break out and take the additional steps needed to use a Microsoft desktop-software product. Will this quiet integration slowly bleed away Redmond's business? Call it death by a thousand hyperlinks. yeah, Microsoft definitely needs to take heed. Google's long term plan, whether they admit or not, is to slay microsoft. I won't be surprised when they release their OS. I know it's coming.
Microsoft is finally taking a little action on their end with the new office and LIVE, but they need to expedite their entry into this market before it's too late. I'm sure they're aware of this and have been focusing their guns, but the amount of time it takes them to execute will be the determining factor. I still can't access hotmail via IMAP or POP. That is annoying! It's items like this that frustrate the users and push them further away from Microsoft and into Google's arms. How does Google make money by letting users open an Excel spreadsheet in a browser-based, second-rate spreadsheet application? Why do we all seem to forget that we've already gone through a failed wave of ad-supported software attempts?
If you look at Google's portfolio 89% of all usage comes from search only 5% from mail and the rest is an infinitesimal mix (http://weblogs.hitwise.com/bill-tancer/2006/05/google_properties_understandin.html). Google�s strength is providing highly targeted advertising in a way that small businesses can take advantage of. If the application doesn�t support an environment where a *relevant* ad can be placed its effectiveness is lost. The SMBs who advertise through Google do so because it�s the most cost effective advertising model with the highest rate of conversion. At least it was (http://www.businessweek.com/the_thread/blogspotting/archives/2006/02/google_and_yaho.html)� as they start to add less relevant advertising models (those that are not searched based� UTube, Desktop apps, etc.) advertisers are going to see lower conversion rates and start to go elsewhere. Users still value the UI experience and wrt to desktop apps they want a productive environment... both of which Google lacks. Google might steal some traffic but in the long run they�ll lose the money� 
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