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TheStreet Open House

Microsoft, Pals Try Ringing Google's Bell

NEW YORK ( TheStreet) -- As a technology reporter for 30 years, the Bell companies have been my primary source of frustration.

The reason for frustration is that they're utilities. They live in a world of regulation, not investment. They don't put $1 out until they have convinced government to guarantee them $2 will come back. When your business model is based on regulation you can't take risks. There are too many stakeholders.

In the Internet age we've seen what that leads to. Google (GOOG), whose networks are not regulated, and which gets no government subsidy, has built IP networks that are superior in every way to what the utilities have.

Not just the Bell utilities like Verizon (VZ) and AT&T (T), but the cable utilities like Comcast (CMCSA) and Time Warner Cable (TWC). They've proven this in Kansas City, and they're going to prove it as well in Austin, Texas.

Almost two decades ago Microsoft (MSFT) fought the law, and the law won. Microsoft eventually got the government off its back, but along the way it got saddled with lawyers, flacks and naysayers who took its eye off the competitive ball. Micro-management kills your ability to change quickly, and it's clear Microsoft no longer can.

So Microsoft is becoming a utility, campaigning through government on both sides of the Atlantic to do to Google what it did to itself. It complains that Google is a monopoly that is embracing and extending itself into content and devices, what Microsoft was charged with doing last century. It also claims that open source is predatory.

Of course, you don't fight a lobbying war in the open. It's not Microsoft vs. Google, Microsoft insists. Instead, the company has helped build an umbrella group called Fairsearch with 16 other companies. Originally this was just a few travel outfits, like Expedia (EXPE) and Kayak (KYAK).

Microsoft's entry to the group sent it into overdrive, going after Google across a broad front. When Oracle (ORCL) and Nokia (NOK) joined last year, the lobbying went into orbit.

According to a Google blog site called Googlecompetition Fairsearch is run by the Glover Park Group, a Washington lobbyist with almost 50 "leaders", including former Clinton operatives and Ketchum's former digital director.

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