Here’s the scene. Google is the dominant internet company, owning search to the point that it’s effectively a monopoly. It makes huge amounts of money from this, and the dominance in this area will continue for the foreseeable future.

Yet it’s also David in some other battles. In mobile, it’s struggling to displace Apple’s iOS in mindshare and in terms of profitability. In social, it’s desperately trying anything it can think of to compete with Facebook. This week’s announcement of Google Plus follows other (failed) battles such as Wave or Buzz.

So, Google is the dominant internet company, and it’s constantly innovating. But it’s also wary of becoming the Microsoft of the internet age: Microsoft is still the world’s dominant software producer, but there is no doubt that it’s a company in decline. It’s still making huge revenue, but income from desktop OS (Windows) and productivity software (Office) will shrink over time, displaced by commodity software from Google and others on the desktop, and hit by the move from the desktop to mobile and tablet centric computing.

John Gruber this week pointed out that there’s very little innovation in desktop OS these days: Mac OS X Lion — incremental changes, but a conscious repositioning of the desktop as a peer of mobile and tablet, and modest excitement (and then only from Mac fans); Windows 8 — is anyone excited by the small polishings of an already competent product?

So just as Microsoft is in decline, Google knows it risks the same fate. One key difference between the two, is that Google seems less averse to the risk of experimentation. Microsoft, however, only innovates when really pushed into a corner (think Xbox and Windows Phone 7). How far does it have to be pushed into the desktop and productivity corner before they innovate radically?

Pause for a second to think of the might of Google — impressive that it can fight 2 huge wars on different fronts, against giants in their own fields — Apple and Facebook.

Sure looks good to be a consumer now. Who knows what the landscape will look like in even 2 years.

Anthony Green — June 2011