Perhaps the most vital asset to any technology company today is its reputation.

It's not money. It's not assets. It's certainly not patents.

It's what people think of you, your reputation.

Paul Robichaux recently wrote that he thinks Google is pulling a fast one, with a Toolbar feature called AutoLink that turns unlinked items on a page into linked ones, automatically.

When Microsoft tried extending its Smart Tags feature, which sounded awfully similar, into Internet Explorer, Robichaux wrote in Exchange Security, "the furor was incredible. Walt Mossberg, Dave Winer, Dan Gillmor, and a host of other influencers immediately started screaming that Microsoft was taking control over web content and generally acting like an 800-lb gorilla. The EFF even opined that the MS smart tag implementation might be illegal."

He's right. But does it matter?

Microsoft has used its power for a decade to extend its monopoly across desktop applications and into the Internet itself. As a result it has a very poor reputation.

Google, on the other hand, has offered optional services, in software, on top of its search service. It has a stellar reputation.

Google is now doing to Microsoft precisely what Microsoft did to IBM back in the day. Microsoft's price-earnings ratio today is 28. Google's is 137.

What happened?

Well, I was there. I saw what happened.

Back in the 1980s IBM was the 800 pound gorilla, Microsoft the little upstart. IBM made pronouncements from on high. Bill Gates showed up at Comdex parties, unannounced and unescorted.

IBM's reputation was based on control. IBM had controlled the mainframe market -- hardware, software and applications. IBM controlled the customers, and IBM was now embracing the PC, extending its reach. Gates was this little guy up in Seattle who was, slowly at first, challenging IBM's dominance, buying small development shops with "high bandwidth" people so he could create cool new capabilities.

It worked. When Microsoft divorced itself, and Windows, from IBM's OS/2 in the early 1990s the crowd followed Microsoft. Big Blue's power was broken. Microsoft became Big Green.

The question today is whether Microsoft has done any better by that power than IBM did. The answer, to many people, is no. As its power has waxed its reputation has waned.

Only now is it paying the price. Gates warned, continually, throughout the anti-trust struggles of the 1990s, that Microsoft remained vulnerable, that the market continued to move.

He was right. It did. I think his intransigence, and his lawyering-up, helped that process along considerably. He could have easily split up Microsoft in the 1990s and kept both his power and reputation intact. But the process has continued, for a decade now, so that every move Microsoft now makes is heavily scrutinized, and the world is looking for new upstarts.

Open source is an upstart. Google is an upstart. Even IBM is now an upstart. People trust open source, Google, and even IBM in ways they don't trust Microsoft anymore.

And all, I think because Bill Gates took his eye off the key asset of reputation. PR can't guarantee you an unblemished reputation. Only you can do that, by treading lightly, by treating customers well, and by treating competitors collegially.

Hopefully, Google will remember this Clue. If it fails to do so, all the money in the world won't be able to save its reputation. Larry Page and Sergey Brin will become LarSergey of Borg, and that will be the end of that.

And if this scares you, maybe Larry and Sergey are already being assimilated.