Is Google Reagan's U.S. to Microsoft's USSR?...

Certainly in light of Microsoft's purchase of aQuantive, that comparison seems pretty apt.  Microsoft has a lot of cash, but if it has to keep making deals like that in order to stay on par with Google, then the company is in trouble -- sort of like the Soviet Union.

The Stalwart

Interesting comment from The Stalwart that compares Microsoft's acquisition of aQuantive (for $6B!) as a move to keep up with Google in this new "arms race" a la the Soviet Union's bank-breaking spend in the days of Reagan's Star Wars program.

Obviously Microsoft has the cash, but is this the most prudent strategy?  Only time will tell obviously, but the alternative that I prefer is to "change the rules".

As Seth Godin writes:

Market leaders make up the rules. They establish the systems and the covenants and the benchmarks that a market plays by.

If you play by those rules, you will almost certainly lose.

After all, that's why market leaders make rules. They establish a game that they can win, over and over again, against smaller or newer competitors.

The alternative is both obvious and scary: Change the rules.

Newcomers and underdogs can only benefit when the rules change. The safe thing to do feels risky, because it involves playing by a fundamentally different set of assumptions. But in fact, dramatically changing the game is the safest thing you can do (if you want to grow).

Seth Godin, "Playing by (and losing by) the rules"

If Microsoft fancies itself a market leader, it needs to retake the lead... somewhere ... somehow.