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Jon Talton

Analysis and commentary on economic news, trends and issues, with an emphasis on Seattle and the Northwest.

July 8, 2009 at 10:15 AM

Google’s shot at Microsoft a reminder that competition is everywhere

Top of the News: The announcement by Google that it is developing an operating system for PCs is a timely reminder that Seattle doesn’t face competitive threats just because it is saddled with those pesky union aerospace workers.

Google isn’t based in South Carolina and isn’t staffed by cheap employees. Rather, it’s a nimble, aggressive talent magnet, full of creativity, and fast-growing to dominance. In other words, it’s the kind of company Seattle once had a penchant for growing. Now the granddaddy of them all, Microsoft, is mature and under attack. The Google threat may seem small for starters — it won’t be in the long run.

At the risk of a self-serving analogy, part of Microsoft’s challenge reminds me of what faced the newspaper industry in the 1990s. The profit margins from classified advertising (read Windows) were so comfy that they prevented the big newspaper chains from responding to an obvious threat — that somebody would come along and give ads away for free.

The Midweek Briefing: Perhaps in solidarity with Boeing workers, Hammering Man, the imposing sculpture outside the Seattle Art Museum, was motionless this morning.

–The ethanol lobby is massing to make sure its subsidies and preferred treatment aren’t gutted in the new energy bill, according to TreeHugger. The fuel is controversial in part because of its effect on the supply of corn for food. The harsher reality is that it is a net energy loser, taking more fossil fuels to produce than it replaces, a problem with many alt-fuels. It does have high-octane political friends.

–The U.K.’s Telegraph has an interesting commentary about the “timebomb” ticking if unemployment continues to be a problem in the West. The writer wonders how long before it provokes a violent reaction against governing and business elites. My prediction: Never, as long as the public is drugged with Michael Jackson, electronic distractions and endless driving.

–Mortgage fraud in the U.S. is “rampant” and growing, according to Reuters. One driver, according to the FBI, is some industry employees trying to keep up the paychecks they enjoyed during the boom years.

–In the Ouch Department: Taiwan’s exports fell by 30 percent in June from the same month a year earlier.

Today’s Econ Haiku:

Will Boeing brass sign

A “No Bosses’ Screwups” clause

If unions don’t strike?

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