The rivalry between Microsoft and Google has really heated up lately, but this wasn’t always the case.  Let’s take a quick look at how the two companies originally weighed-in, how they came to compete with each other, and where the fight has gone.

When Google first came to the market, it didn’t seem to be a competitor of Microsoft.  Its internet search engine and ad-based revenue model were entirely different from Microsoft’s operating system, office productivity suite, and other software.  The market really didn’t consider the two as opponents.

Then in 2009, Microsoft launched Bing, a direct competitor to Google’s search engine, although it already had Live Search and MSN. In 2010, however, Google boasted 65% of the market, whereas all three of Microsoft’s search engines shared only 12.5% of online searches (and Yahoo had 14%).

Around the same time, Microsoft took a blow when Google took Google Docs out of beta and soon supported most file types.  This put Google on the map as a real competitor to Microsoft. Then Microsoft fought back with Office Live Workspace (OLW) which allowed versions of its Microsoft Office product to be shared online. At this point, the two companies really kicked off the brawl with more apples-to-apples comparable products competing in the marketplace.

Later in June 2012, Google acquired QuickOffice noting its seamless interoperability with popular file formats.  As Mark Hachman suggests, QuickOffice may make a major difference for Google Apps.  And eventually, QuickOffice is to become the foundation of Google Apps, increasing its capabilities in our opinion, to the level needed to surpass Microsoft.  It may be awhile before we see this advantage, but at the end of Round 1, we think Google is in a strong position.

To see how the fight has developed, check out Round 2.