Google Turns On Charm

Google(GOOG Quote) spent Wednesday's annual open house trying to downplay talk of a growing rivalry with Microsoft (MSFT Quote) for Web supremacy.

"We obviously worry about competition, as any company should," said Larry Page, one of Google's founders, at the event for the press and industry analysts. He added that the Mountain View, Calif.-based company "tries not to be focused on what they are doing," referring to Microsoft.

Chief Executive Eric Schmidt argued that the media shouldn't be obsessed with finding a winner and a loser. Besides, he says Google has "the luxury of time," thanks to its strong cash flow, to continue developing innovative products and services.

"There is room for more than one winner," he says, adding that he was confident that Google would be one of them.

Wall Street seems to think otherwise. Speculation is mounting about the rivalry between Microsoft and Google. The software company recently announced plans to crank up its spending on its MSN Web business, much to the chagrin of its investors.

Google's desire to make nice with Microsoft has its limits. The search engine giant has raised concerns about Microsoft's plans to include an MSN search box on the latest version of Internet Explorer. Google says this will give Microsoft an unfair advantage in steering traffic to its MSN Web portal, a claim that Redmond, Wash.-based Microsoft disputes.

Google will watch Microsoft closely, since the software giant has "not necessarily played fair in other situations," Page says. He described Microsoft as a "convicted monopolist," referring to antitrust battles in both the U.S. and Europe.

Page's blunt response stood in contrast to the mostly vague commentary from Google's management team. Google executives repeated many of the same arguments that they have made before, such as that click fraud doesn't have a material impact on the company's finances. As usual, few specifics were given.

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