Heavyweights trading punches in digital face-off

The two most powerful companies in digital technology are openly invading each other’s most lucrative markets: the office productivity software and computer operating systems Microsoft makes, and Internet search, which Google dominates.

Last week, Google declared an end to “beta,’’ or test status, for its online office software, Google Apps, as part of a new effort to sell the service to corporate users. Then the company said it’s building Chrome OS, a full-fledged operating system for personal computers that will compete with Microsoft Windows. It’s due next year.

Office software and operating systems happen to be Microsoft’s two core businesses, generating most of its $60 billion in revenue and $22 billion in profit in 2008.

But Dave Girouard, president of Google’s enterprise services division, which targets corporate computer users, said Google Apps and Chrome OS aren’t about challenging Microsoft.

“That’s not how we think about initiatives and opportunities for the company,’’ he said. “We think about big unsolved problems.’’

Still, Girouard took a few potshots at Google’s giant rival, saying a stand-alone suite like Microsoft Office makes little sense in an Internet-linked world.

“Office is a fine product,’’ he said, but “it’s hard for me to believe that it defines the way people work in the 21st century.’’

In fact, Microsoft is working on an Internet-based version of Office and may reveal details today at the company’s Worldwide Partner Conference in New Orleans. Microsoft executives were not available to comment.

Google said 1.75 million businesses now pay $50 per year per worker to use Google Apps, but most are small or mid-size firms. Large companies have proven more resistant, partly because until last week Google listed Apps as a beta product. “We were spending too much energy trying to explain to people why beta’s OK,’’ Girouard said.

Meanwhile, Microsoft has stepped up its efforts in Internet search. In June, Microsoft unveiled Bing, an upgrade of its Live Search service that has won strong reviews from analysts and consumers.

According to Hitwise, an Internet company that tracks website visits, Bing’s popularity grew steadily through June, even after the first buzz of publicity for the site began to fade. Still, Bing attracted just over 5 percent of US Internet searches, compared to Google’s 74 percent.

Danny Sullivan, editor in chief of consultant website Searchengineland.com in Newport Beach, Calif., said Microsoft is on the right track with Bing, despite Google’s immense lead. “I think it’s important that Microsoft has been challenging them,’’ he said. “They see that there’s a lot of money to be made there, and they feel they should get a slice of it.’’

Google sites attracted 157 million US visitors in May, according to comScore Inc., which tracks Internet traffic. That flood has enabled the creation of an online advertising empire that generates most of the company’s revenue: $21.7 billion in 2008.

Microsoft wants to cash in, as well. Sullivan said the company can steal search-market share from weaker players, like number-two Yahoo, which holds about 16 percent of the market. Yahoo fended off a Microsoft takeover last year, but Yahoo is so weak, Sullivan said, that Bing could grab much of its audience without having to buy the company. That would give Microsoft’s search engine 20 percent of the US market, enough to pose a major threat to Google.

But no analyst said Microsoft will knock Google off as the dominant company in Internet search. And there’s a lot of skepticism about Google’s efforts in office software and operating systems.

Al Gillen, an analyst with IDC Corp. of Framingham, noted that many Google Apps features, like word processing and spreadsheet software, are available for free. Gillen said workers who see benefits from online office products will use these products at no charge, but their bosses will probably cling to Microsoft Office.

“The people who make the decisions are going to be very concerned about security,’’ Gillen said. He predicted that executives will shy away from online services that store sensitive company documents on somebody else’s computer.

As for the Chrome operating system, Google has said it won’t be available until the second half of 2010, and then only for inexpensive “netbook’’ portable computers.

Matt Rosoff, an analyst at Directions on Microsoft, a Kirkland, Wash., firm that specializes in tracking Microsoft, said that by creating a rival operating system, Google is leading with its chin.

“I don’t see why Google has to get into this business,’’ Rosoff said. “It seems like they’re waving a red flag directly at Microsoft’s core business.’’

Microsoft has crushed a host of erstwhile technology titans that posed similar head-on threats - browser maker Netscape and networking software company Novell Inc., for example, he said.

What’s not clear is whether the world needs another computer operating system, say skeptics of Google’s move. Multiple versions of the Linux operating system have long been available at no charge, but most consumers want no part of them, preferring the familiar look and feel of Microsoft’s Windows or Apple’s Mac OS X.

Gillen said that even if Google manages a breakthrough with Chrome, it won’t happen overnight. “In the next two years, I don’t think this poses any threat to Microsoft,’’ he said, “because it’s going to take two years for this to gain any traction at all.’’

Hiawatha Bray can be reached at bray@globe.com.