You know you’ve seen them; those commercials on television where Microsoft Corporation (NASDAQ:MSFT) outs Google Inc (NASDAQ:GOOG)as a company that doesn’t have your best interests when it comes to privacy matters. It’s a brilliant strategy for Microsoft Corporation (NASDAQ:MSFT). It is one that the company has been working on for well over a year now, facing off with Google on a number of different subjects. Lately, it has been all about how safe your information is in the hands of Google Inc (NASDAQ:GOOG), according to Microsoft Corporation (NASDAQ:MSFT).
Microsoft vs. Google
Microsoft Corporation (NASDAQ:MSFT) and Google Inc (NASDAQ:GOOG) are going head to head against one another in a number of areas: search, enterprise, and advertising. Microsoft is way behind in search and the advertising revenue that goes with it. According to comScore, Google has 66.7% of the search market while Microsoft Corporation (NASDAQ:MSFT)’s Bing has 16.3%. This is while Google Inc (NASDAQ:GOOG) is trying to build a user base in the enterprise space, a market that Microsoft handily beats Google in.
When it comes to search specifically, there is an opening for Microsoft to criticize Google Inc (NASDAQ:GOOG) in the hope of taking away small bits of market share. Google’s advertising business is over $50 billion in revenue per year, and if Microsoft can just shave a few points off of that, they can declare a victory of sorts.
Enter Facebook Inc (NASDAQ:FB) in the fray
Search and advertising is a tough market, however. Facebook Inc (NASDAQ:FB)‘s status as a public company now means that they have got to get their act together in terms of revenue. One way for them to do that is to encroach on this Google-Microsoft diaspora. It’s pretty clear that they want to somehow disrupt the ads business so it’s not out of the question that Facebook Inc (NASDAQ:FB) could be looking to get into search at some point.
But if Facebook Inc (NASDAQ:FB) tries to do that, privacy will remain an issue. Remember that Facebook Inc (NASDAQ:FB)’s strategy for selling advertising is to target users based on their demographics and other personal information that has been willingly provided. We’ve already seen, to some degree, that the public isn’t necessarily comfortable with what Facebook is doing. This is true with their new mobile offering, dubbed Facebook Home. Microsoft could do well by promoting this fact to the masses like they already do with Google.
The issue remains hot
Privacy is going to continue to be a hot topic in technology over the coming years. Microsoft is getting ahead in the game by creating two different sides: one that cares about privacy (Microsoft) and one that does not (Google). Yet, this strategy could backfire for Microsoft if it turns out that they are actually doing the same exact thing as their competitors.
As the advertising market has already moved to digital for the most part, the targeting of users might just be the next step in order to increase revenue. How is Microsoft going to be able to compete with that? The Facebook-Microsoft relationship is already complicated. Right now, the Federal Trade Commission is investigating some data brokers over their collection practices. A few of these companies have ties to Facebook. Microsoft was an investor in Facebook before they went public. The two companies also have a strategic deal, where Microsoft’s Bing complements Facebook’s Graph Search.
Consumers get caught in the middle
Meanwhile, the squabbling between Google and Microsoft will continue. Just recently, there was a report that Microsoft treats outside security research “with hostility” if the information is potentially damaging towards its own products. Of course, the person who brought these accusations against Microsoft works for Google.
The battle rages on with no clear winner in sight. Microsoft’s marketing messages make users think about what is happening to their data, which can be a good thing. But their partnership with Facebook brings into question whether they are doing anything differently than what Google does. Just recently, Microsoft was under investigation in the European Union for making changes to its privacy policies, similar to something Google had previously done.
Google is the bellwether to beat, and it looks like Microsoft and Facebook could slowly lose ground in the long-term. The problem can be partially attributed to public perception of Google versus Microsoft.
The article This Tech Company Is Touting Privacy for Good Reason originally appeared on Fool.com and is written by Daniel Cawrey.
Daniel is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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