Google's former CIO says the search engine's bitter rivalry with Microsoft taught him a valuable lesson about dealing with competitors

Douglas Merrill Bloomberg 6252RETOUCHED

Douglas Merrill served as Google's chief information officer between 2003 and 2008, during which time the search giant went public and released flagship products such as Gmail.
Merrill told Business Insider that Google's difficult relationship with Microsoft in the 2000s taught him a business lesson he still draws upon today.
He said that although it might not feel like it, it's helpful to have "good, hard competitors."
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Even by the cut-throat standards of Silicon Valley, Google's rivalry with Microsoft in the 2000s was decidedly bitter.

At the start of the decade, the pair were competing in the increasingly lucrative internet advertising market, with Google establishing itself as the search engine of choice for erstwhile internet giants AOL and Yahoo.

The launch of Gmail in 2004 also threatened Microsoft, with the storage capacity of Gmail said to have been 500 times that of Hotmail, Microsoft's email service. In 2005, Microsoft even sued Google for allegedly poaching one of its top executives.

Douglas Merrill was Google's chief information officer between 2003 and 2008, when their rivalry was arguably at its peak. Speaking to Business Insider, Merrill says that although he disliked the animosity, he learned an invaluable business lesson from it.

"Everyone was being mean to everyone else, which was something I found pretty unhelpful," says Merrill, now the CEO of financial software firm ZestFinance.

Bill Gates

"At the time, we were getting called jokers in the press [by Microsoft], and we were being pretty quiet, although there was a lot of mud being slung at us."

According to the 49-year-old, things got so bad that Google considered boycotting Microsoft products.

"At some point — I can't recall the specific date — the mud-slinging got bad enough that we were wondering if we should even buy Microsoft products at all, which would have been really unhelpful for the organisation.

"We had to sit down and take a decision on whether we were willing to continue taking this abuse, or whether we were willing to take the pain associated with [stopping using Microsoft's products]."

microsoft employees

Ultimately, Merrill says, Google decided on a compromise. "We decided to go half-and-half: we removed some Microsoft products and we kept some."

Yet, far from being an episode he'd rather forget, Merrill views Google's rivalry with Microsoft as fundamentally beneficial.

"From my perspective — and from the perspective of ZestFinance as well — a company is made better by having good, hard competitors," he says.

"And at the time, Microsoft and Google were good, hard competitors. We were each doing our best to win, and pitting really good people against [each other].

"At ZestFinance, we're working against our competitors, doing our best to win, too. You're always better when you have someone to compete with."

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