Google Gets Ready to Rumble with Microsoft according to a long Sunday New York Times article by the usually insightful Steve Lohr and Miguel Helft. They describe an epic battle where Google is pushing its vision of everything happening on remote servers and Microsoft wanting to keep their desktop software in the center. There’s nothing new for those who follow this business but the article misses what’s really going on.

Everything the hyperactive Google does is based on a very simple business model for which “cloud” computing is just one of many means to and end. Google is an advertising company. It cares about finding as many places as possible to place ads and in driving traffic to those ads to make money. That’s why they are going after every screen—the PC, the television, the mobile phone—that people look at. Google would be singing the praises of Microsoft’s desktop apps if only Microsoft let them put ads there. Microsoft is a software platform company at heart. It wants its software to be what developers write to so that it increases the value to users whom it collects money from.

Sure, the idea of all software moving to a web-based platform in the cloud is a scary issue for Microsoft to deal with. But that’s nothing compared to the big threat Google poses: Google’s hugely successful advertising platform incents it to give everything including the kitchen sink and word processing software away for free so long as it can place ads and drive traffic. The epic battle isn’t about the cloud, it’s about advertising.