Google is the new Microsoft, and therefore direct competition with Google should be avoided at all costs — that is Paul Graham’s takeawy from the news that Kiko, a web calendar play done in by Google Calendar, is autioning off its assets:

The best solution for most startup founders would probably be to stay out of Google’s way.

David Heinemeier at Signal vs. Noise doesn’t buy it and neither do I. David says:

No. Don’t run, don’t hide. Be different. You can’t outdo Google by trying to match them point-by-point, but you don’t have to. There are other, better ways to fight. Compete differently.

Here’s my take: If Goggle is the new Microsoft, that’s actually great news. Why? Because Micrsosoft is the old Micrsosoft, and they are now chasing Google, which demonstrates the precariousness of market leadership. And the cycle is speeding up.

So Google has more cash than you — a LOT more. And they’ve hired a LOT of smart people. But that doesn’t mean they are alway smarter. Smart people do notoriously stupid things. And it doesn’t mean they have cornered the market on innovation or creativity. Even Google wasn’t Google until someone at Google woke up one day and realized that the first geneation of AdWords was stupid and then came up with the idea of combing the keyword auction with relevancy to create the AdWords that makes billions today.

Do all of the companies going head-to-head with Google have a fighting chance? Of course not. Most probably don’t.

But if we cede the fight to Google now, they’ve used our own fear against us. And that is truly an unfair advantage.