"What Google has done in terms of doing a great end-user experience has led us to basically go back and redouble our efforts," Microsoft Vice President Yusuf Mehdi, who oversees the MSN division, said at a conference held by investment bank Goldman Sachs last month. "We are investing a lot to build what we expect and hope will be the best-in-class search service in the near future." [Cnn.com, hat tip to Dave Winer]

Let's see... not so many years ago, Google came out of nowhere and pretty quickly displaced the then-leaders in search, such as Alta Vista (remember Alta Vista?), because there are virtually no barriers to switching on the Internet... the competitor is only a click away. Can Google possibly think Microsoft doesn't have the oomph to do the same thing to them?

A key thing about search is that the information at its core is open to all. This makes it quite different competitively than the situation of Microsoft vs. AOL with regard to chat. AOL's chat customers -- the source of AIM's value, since many companies are capable of copying AIM technologically -- are AOL's. So AOL has been able to protect its preeminence for quite some time. (Although they may be on the verge of capitulating.)

The situation with search is entirely different because there is no source of value that Google owns that can't be copied by Microsoft through purely technological means. Sure Google has patents having to do with their mathematical algorithms, but when it comes to math, there are many ways to skin a cat. The necessary data -- the Web itself -- is available to anyone who wants to compete.

This gives some context to Google's recent acquisition of Blogger. They want, and need, to have what AOL has -- a captive human source of value. But if they expect Blogger to help them at all, they're going to have to do a much better job technologically with blogging than they are now, as exemplified by the second post at this link. Some people have high hopes about what Google can do for blogdom by applying its search technology. But Microsoft can do the same thing, and certainly will if and when they come to perceive that blogdom matters, and after enough of the infrastructure for blogging has been already built that they can "embrace and extend" it.

The most important fact for Google's future is that only Microsoft can put its search capabilities right in the face of the majority of computer users practically overnight. It can do it in such a way that it's easier to access than Google is (arguably they're doing that today, but today it doesn't matter because they haven't yet put together comparable technology). Of course that would blatantly violate antitrust law since they would be using their monopoly in one area (operating systems) to gain dominance in another (search), but that's never stopped them before, has it?

In summary, Google is in very big trouble. It is not inconceivable that they can save themselves by trying to own most of the blogger population as AOL has owned most of the chat population. But given that there are other blogging tools out there that are arguably superior to Blogger, and given that most of the interfaces to enable high-tech collaborative filtering in blogdom are open, and given that they are likely to stay that way because the blogging world does not want to be owned by one particular company, it seems quite unlikely that Google will be able to parlay Blogger into an AIM-like advantage.

I wonder if in the end, Google will at least be able to be sold to someone for pocket change.

Update later the same day, thanks to a link on Dave's blog (total coincidence in timing): Here is Google's first attempt to use their search-engine dominance to give special powers to Blogger, in the hopes of pulling in the blogging community. (Search the linked page for the word "BlogThis".) They want to motivate the blogging world to use their tools so that they can pull an AIM, to coin a phrase, against MS. This is exactly the kind of use-one-monopoly-to-create-another thing Microsoft is so expert at. But I don't think Google has the power to pull it off. Dave thinks that they "should" have created an open API. I wonder if he understands the real context. But I must say that I personally feel they are so unlikely to successfully pull an AIM that they'd probably be better off trying their best to be very nice to the whole blogging community, rather than spending their goodwill in a quixotic attempt to capture it.
6:31:22 AM