Google has a head start right now over Microsoft. It should make the best of the current advantage because even though its Redmond, Wash.-based rival might no longer be a great sprinter it still knows something about winning a marathon.

It is likely, in fact, that Microsoft will eventually overtake Google in that business. Just not yet.

Pound for pound, Microsoft outweighs Google. It has a more diversified business; it's hugely profitable—even much more so than Google—and has a boatload of cash and short-term investments.

At the end of the first quarter 2007, Google reported cash and short-term investments totaled $12 billion compared with Microsoft's $26 billion for the fiscal year ended June 30, 2007.

Three fiscal years ago, Microsoft had more than $60 billion in cash until declaring a special dividend payout of about $30 billion to stockholders.

Many investors and analysts believe Google is a faster-growing company in a newer market and they seem convinced Microsoft has become a stodgy old-timer in the technology world. That view is shockingly ignorant. Revenue at Microsoft grew 15.5 percent in fiscal 2007 from the prior fiscal year.

It's calendar 2007 revenue of $58 billion dwarfs Google's $16.6 billion. Furthermore, Microsoft's 80 percent gross margin is definitely better than Google's 60 percent and 59 percent at Yahoo. Also, net income at Microsoft for calendar 2007 was $16 billion compared with $4.2 billion for Google and $660 million for Yahoo.

Of course, Google's 56.5 percent revenue growth rate in 2007 far exceeds Microsoft's and this perhaps explains why investors value the company at about $183 billion versus Microsoft's $277 billion.

Nevertheless, Google cannot continue to grow at this explosive rate; analysts estimate the company's sales growth for 2008 would be a more sedate 10 percent.

Microsoft isn't guaranteed to win its ad war against Google but the company has considerable experience going against upstart rivals and beating them in the long run. Anybody remember Netscape?