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2008: Google, Yahoo and MSN Join Together

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This just in: Microsoft, Google and Yahoo have agreed to combine forces to create universally accessible platforms while providing clearly unbiased information access points for all humanity.

Well, maybe not.

It looks a little more like this: Google, Yahoo, and Microsoft do battle over search and platform restrictive productivity enhancements. Senior managers all stand to make billions while they bicker over which company is the most altruistic.

Well, maybe that's a bit harsh.

Just when you thought the search world was slowing down, last week's press frenzy ensured excitement for all. Here's an industry insider's view of the situation in a nutshell.

Tears of Green

The strengths and weaknesses of each company involved in the discussions to date have been clearly defined. Hitwise reports that for the week ending January 26, the combined assets of MS/Yahoo would represent 15.6 percent of all Internet visits, compared to 7.7 percent for Google.

In the search world, Google represented 65.98 percent of search activity for January, while Yahoo and Microsoft only represent 27.84 percent of searches. Of course, there's a whole lot more to the Web than search.

Leaving aside international arenas in which Yahoo still dominates, there are many important strong points for Yahoo. For the same time period in January, Hitwise reports that Yahoo is number one in e-mail with 54.63 percent U.S. market share (compared to Gmail's 5.51 percent), Yahoo News has 7.38 percent and Yahoo Finance has 29.15 percent U.S. market share. In each of these three examples, MSN sites rank second. Beyond search, Yahoocrosoft sounds like a sweet deal.

Unshelled Nuts

Microsoft's bitter rivalry with Google over the years has been the subject of entertaining blog fodder and the occasional mainstream press op-ed. Microsoft dominates the software world and Google dominates the search world. Both companies have been competing for talent and audience share while the consuming public searches for technology that actually works.

In the fall of 2005, rumor has it Steve Ballmer threw a chair and went a little ballistic when a top Microsoft employee decided to go the Google way. Yahoo has been getting hit pretty hard in the press because analysts compare search traffic and revenue with Google, don't understand the business, and declare Yahoo legally dead.

While Yahoo was busy contemplating buyout and merger offers, Microsoft came across the table with their own offer. When Yahoo didn't respond to said offer fast enough, Big Blue went public with it and all Hades broke loose.

Caged Fury

Google has since come out in support of Yahoo against a hostile takeover by Microsoft. I was shocked. It doesn't seem petty and cheap at all, particularly in light of how outspoken Microsoft has been against Google's acquisition of DoubleClick.

Naturally, there was a bit of thought involved in the potential Yahoo buyout. Yet for a whole lot of reasons, the Internet world seems a bit confused about how it will all shake out. Yahoo shareholders, along with the FTC, have to decide if Yahoocrosoft is a good idea.

What I find particularly nauseating in this whole thing is the public posturing. Usually, a merger like this will mean consolidation, which translates into a whole lot of people losing their jobs, along with at least a year or two of painful consolidations and headaches for consumers. Meanwhile back in the PR boxing ring, the combatants involved are declaring themselves "tech providers of the people," while chanting "The Battle Hymn of the Republic," or something along those lines.

Stop crying foul and pointing fingers and call it what it is: a race for big money, nothing more.

Arguing Over Spilled Megabytes

If I were Google (instead of publicly crying sour grapes), I'd be waiting anxiously for the potential buyout and capitalizing on the obvious opportunities that exist when two competitors come together.

Confused audiences seeking stability could find solace in Google's ever advancing product offerings while Yahoocrosoft sorts out merger details. Since Google's earning's call last week indicated a slower than expected social media revenue growth situation, focusing on opportunities there might not be a bad idea.

Additionally, everyone cashing out who doesn't suddenly become an angel investor (and therefore, an instant expert on everything), along with disenchanted employees that every merger produces, could be great new hires for Google.

Yahoo doesn't need Microsoft; it could partner up with Google, sell to AOL, or even continue going it alone. The next few months (years?) promise to be very exciting in the search world. We can only hope thinking about the long game at some point reaches "top of mind" status.

Join us for SES London February 19-21 and for training classes on February 22.


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