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Here's one thing Google and Microsoft agree on (and they're right)

sergey brin google glasses
sergey brin google glasses

(Flickr / Thomas Hawk)
Google cofounder Sergey Brin sports an early version of Google Glass

While Microsoft under Satya Nadella has made peace with a lot of former enemies, Google is still near the top of its hated competitors list. Nadella even took a shot at Google's plan to wire the world using Internet-beaming balloons in my interview with him today.

But there's one area where the two companies seem to be in total lockstep: augmented reality has much bigger potential than virtual reality.

A refresher: Virtual reality, like the new Facebook Oculus and HTC Vive, completely immerse you inside a computer generated world. It's like being inside a 360-degree video game, or movie, or computer-generated simulation.

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Augmented reality devices superimpose a computer-generated image on top of the real world. So you might still be able to look around your living room, but on top of your normal furniture you'd see other images, like blocks from Minecraft.

That's the image Microsoft presented to the world with HoloLens, which it first unveiled in January 2015, and which has been steadily improving since then.

Google has played both sides: the early Glass glasses were augmented reality, while its Cardboard viewer is virtual reality.

But according to a report in The Information today, Google's long-term bet is on augmented reality. The company is making not one but several follow-ups to Glass, and has a project called "Tango" that aims to outfit smartphones with computerized "eyes" that can map a 3D space. It also was an early lead investor in Magic Leap, a secretive AR startup that's raised more than $1.4 billion.

Having tried both, I agree with Google and Microsoft.

Augmented reality allows people to interact with the real world in new ways. That's what smartphones did so effectively — a single $500 device would let you find driving directions, communicate in dozens of different ways, take and share photos, and even shine a flashlight in the middle of the night on a camping trip. And play games.

Virtual reality is more like traditional PC or console gaming — not a small market by any means, but nothing close to the technical revolution that smartphones wrought.

Glass failed because it didn't do enough, looked dorky in public, and was botched by a confusing rollout where a product meant for developers was suddenly appearing on the heads of normal people in public spaces. But in the long run, I think Google had the right idea.

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