Tristan Louis has compiled some excellent comparison charts of products across the Big 4 Internet companies - Google, Yahoo!, Microsoft and AOL [nb: Tristan's site was down when I checked, but you can also access his post here on Google cache]. The charts are worth poring over, but the crux of them is this:
"Google does innovate in some spaces but has largely innovated in order to gain entry in markets that already existed. As a rule of thumb, they've been very smart at breathing new innovations in those markets. However, their competitors are generally quick to notice and are catching up."
Jeremy Zawodny outlines his Google is Building Yahoo 2.0 theory in response - which btw I had the pleasure of hearing first-hand last month when I visited the Yahoo! campus. Jeremy wrote:
"...it's as if someone decided to re-invent more and more of Yahoo's popular services in random order, giving them a fresh user interface, less historical baggage, and usually one feature that really stands out (such as Gmail's storage limit or Google Talk's use of Jabber)."
Scott Gatz, who is Senior Director of Personalization Products at Yahoo!, also weighs in on his blog:
"Google is replaying Yahoo’s playbook circa 1996. Back then, we simply looked at what people were searching for and then built services that they wanted. Filo called the query logs “our to-do list”."
My take is that of course the Big 3 (I think we can discount AOL from this level of competition) have a very similar product line - because they're all building 'portals'. It may not be currently fashionable to call them portals, but basically Google, Yahoo! and Microsoft are all trying to integrate products and services into one-stop shops for their millions of users.
Of course Yahoo! has been doing that for 10 years or so now, although Microsoft has been no slug either with its MSN offering. Google is relatively new to this game, so it appears like they're copying the other two. But I see it more as a generic product and service line that any big player hoping to be an Internet Portal needs to pad out.
What's of more interest to me is the 2.0-izing going on in each of the Big 3 right now. Dave and Om are right to point out that this is what each of the Big 3 should be doing. I think Yahoo! is already doing that with their media focus; and Microsoft is making all the right noises in its Windows Live and Office Live announcements.
I'm not sure what Google is doing, other than continuing to create portal products (some of them killer, like Gmail) and generally scaring the bejeebers out of Silicon Valley start-ups with beta experiments like Google Base. Everyone is waiting for Google to announce a cohesive and integrated Web 2.0 plan of attack, but Google isn't talking - even Sergey Brin at the Web 2.0 Conference didn't get drawn into the portal debate. And that's what makes them so dangerous!