How would GOOG respond?

Rav said:

May. 21, 3:38 PM

I agree that this is a direct and I would say somewhat irrational attack by MSFT on GOOG's cash cow. Gloves are off now. I think the way GOOG would respond would be:
1. Be more determined and aggressively go after the YHOO ad outsourcing deal. MSFT has made it obvious by this move, that their real intention behind getting the scale on internet search is to kill the market, not milk it. This is what GOOG guys are afraid of. They don't mind competition as long as its fair and based on merits and not on subsidy. This is also the reason that Yang is reluctant to sell out to MSFT.
2. Undercut MSFT with Google apps. I wouldn't be surprised if they soon provide a fully functional offline office applications package, without requiring gears and internet connection.
3. Go after the WIN XP and Vista markets. I think with Vista getting bad reputation and the significance of OS waning, now may be a good time for Google to get into this market as well. There is a lot of demand for low cost desktops all over the world. This can be their opportunity to hurt MSFT's cash cow. They already have some experience in the OS domain with their work on android and also have a strong brand.