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Why Today Is Showtime for Google and Microsoft

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Both major tech players have something to prove.

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MINYANVILLE ORIGINAL Today, Google (NASDAQ:GOOG) is expected to release a new version of its Android mobile operating system, and showcase its capabilities on a variety of devices. Based on early reports and leaks, Google will show a next-generation smartphone made by LG, and a 10-inch tablet made by Samsung (LON:BC94).

Also today, Microsoft (NASDAQ:MSFT) will release Windows 8, the multipurpose operating system that it hopes will finally win it a real place in the mobile device marketplace. And it will start fulfilling pre-orders on its new tablet, the Microsoft Surface.

Of course, the timing is about the 2012 holiday season, but it's a lot more than that.

Google (GOOG) has to prove that it can continue to dominate Internet advertising even in the mobile world. That's a point of some urgency since last week, when it announced earnings that fell short, due mainly to the lower prices that advertisers are willing to pay for mobile placements. That's an issue that many other companies face, but it's the guts of Google's business.

Microsoft (MSFT), after years of fumbles, has to prove that it's a major player in the mobile world. Its strategy is as risky as it possibly could be. It's selling one system for use across all devices-mobile and desktop, touch and keyboard, business and leisure, home and office, productivity, and entertainment.

It's a pass-fail test, with not much in between. Windows 8 is so radically different that business managers will be wary of imposing the learning curve and work disruption that upgrading will cause.

But the line between work and home devices is rapidly disappearing. If any of the mobile devices being built with Windows 8 catches on with consumers, they'll demand a seamless transition in the office.

Early reviews are generally positive. Some are effusive, like this one for ZDNet from an IT guy who flatly declares Windows 8 to be "a new era of computing." Others are resigned to the inevitable, such as a Forbes writer who accepts that Windows 8 is the solution for "losers" like him who need function as well as fun in their electronic devices.

But these are folks who don't care much about Microsoft's stock price. A new analysis from Forrester Research predicts that Windows 8 will help the company hold onto its 90% share of the desktop market, but will get the company only about 14% of smartphone sales. And that's not even a near-future scenario. Forrester expects 2013 to be an ugly year for Microsoft, as it makes the hard transition to Windows 8.
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No positions in stocks mentioned.
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