from GigaOM

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Microsoft (Information Age) vs. Google (Connected Age)

Microsoft (MSFT) exemplifies the Information Age. It uses step-by-step, top-down controlled project management methods to build monolithic intangible goods — desktop and client/server software — largely from scratch. It uses money as currency, monetizing knowledge products using licensing fees and strict control of software copying. Microsoft must rely on protecting access to its knowledge goods — because this is where it has created value.

Google (GOOG), on the other hand, hints at the Connected Age without entirely fulfilling its promise. Google uses openly available knowledge, human, software, and hardware resources (with a good dose of its own such resources) and harvests value from those resources by finding and creating relationships. Google monetizes the human behavior on the web — human action captured in web pages as links, content and meta data. It trades in the currency of attention. Across the company, Google uses a more evolutionary development style, seeking innovation by spreading bets over many possibilities, most of which have little chance of success. Google depends on a more emergent style of innovation.

Google, however, is a gigantic corporation. Could the Connected Age make corporations obsolete, at least for purposes of web work? We need corporations for the agricultural, industrial, and knowledge tasks of our society. But an entirely new engine of productivity might be built without formal organizations. Economist Ronald Coase has proposed that the reason firms exist is to decrease transaction costs. But the web makes transaction costs across individuals and ad hoc groups of people so small as to be unimportant to many web-era businesses. That is why we see an acceleration in the number of independent contractors and loose partnerships across small organizations.

— 21C – the rise of the Attention / Reputation Economies.
— MSFT = Scarcity, Google = post-Scarcity