InfoWorld is running an interesting piece this morning that talks about comments made by Microsoft CEO Steve Ballmer in regard to Google and its business practices.  Specifically, Ballmer is critical of the fact that Google continues to be supported by one primary business:  search advertising.  In comparison, he says, Microsoft has moved into countless other markets and has "reinvented itself" many times over.

I disagree, Mr. Ballmer.

First of all, there's absolutely nothing wrong with being a one-income business.  If you're the best at something a one-income business model would work really well.  Look at Starbucks.  Even Wal-Mart.  Technically speaking, both of those successful businesses only really do one thing.

Second of all, Microsoft may have fingers in a lot of markets.  But Steve Ballmer knows full and well that the gross majority of his company's revenue comes from Windows and Office products.  So while it's true that they've branched out, Microsoft isn't a truly diversified company like… say, GE.

In fact, in that regard, Microsoft and Google are a lot alike.  Both companies invest significant resources into entering new markets.  Both companies choose a market to enter and then throw themselves in whole-heartedly.  Their approaches are different, that's for sure.  But the intention behind their actions is the same.  So far Microsoft has been better at making money off of these other ventures.  But they've also had quite a bit more time to perfect their business.

Few companies can master many business and I think few should try.  A couple have been able to pull it off successfully.  But real diversification is much more than simply creating products across a wide range of markets.  Microsoft does that.  And so does Google.  But GE and Berkshire Hathaway do it well.  Redmond and Mountain View haven't mastered it just yet.

All I'm saying is that it makes much better business sense to keep your eye on one goal.  I've been saying that for months.  Microsoft and Google would both do well to refocus their efforts on their core money-making endeavors and stop spreading themselves so thinly across a million other markets.

Simplification and focus - That's how you win the game.

- Matt