Google (NASDAQ:GOOG) always had a problem trying to keep Yahoo! (NASDAQ:YHOO) out of the hands of Microsoft (NASDAQ:MSFT). The No.1 and No.2 search engine firms would have had 80% of the US market if Google took over the function for both companies. As The Wall Street Journal writes, the deal was dead from the start because of "concerns about the intense regulatory scrutiny it could attract, given Google's and Yahoo's significant shares of the Web-search and online-advertising markets,"
There are ongoing rumors that News Corp (NYSE:NWS) and Time Warner (NYSE:TWX) may have an interest with linking up with Yahoo!. If the portal really wants to stay independent, either deal could make sense. Yahoo! could extend its search function over the NWS MySpace property, which is now one of the five most visited sites in the world, or over AOL, which is also in the top five. This could, in effect, move Yahoo!'s search engine share from the 20% range to closer to 30%. That would still be well short of Google which is around the 55% level.
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Reader Comments (Page 1 of 1)
2-13-2008 @ 8:20PM
Creativity And Innovation Driving Business said...
In A Bird (Microsoft Offer) in Hand Worth More than Two in Bush (Google+Yahoo) I talked about the dilemma facing Yahoo.
Yahoo really has four options and if they partner with AOL or News Corp, really five.
1. Tough it out all alone - Obviously this is not working with the ever widening gap between Google and Yahoo. But as long as Yahoo is profitable, it can call its shots. It can do what it pleases. It can take the time it takes to turnaround. And if all that does not work, well, Yahoo can look back and say, we tried! Dell is trying hard to turnaround. Yahoo can too.
2. Get acquired by Microsoft Corporation (NASDAQ: MSFT), the 800 lb gorilla - Can it work? Lose the independence. Lose the freedom. Redmond and Silicon Valley. Unless Microsoft makes Yahoo an independent business. But after Microsoft shells out close to $23 billion or so in cash, would it have the luxury to let Yahoo run by itself. May be not! And who would run the show post acquisition? Jerry Yang or a Microsoft elected official?
3. Partner with the nemesis Google, the company that put Yahoo in this precarious position in the first place, and made it difficult for Yahoo to catch Google. - How will the partnership work? Google is already taking market share from Yahoo, and eventually seize 80% of the Search market - a position that will make Google a virtual lock for years to come. Why delay the inevitable? Can Google really be the friend Yahoo is seeking?
4. Merge with Amazon.com Inc. (NASDAQ: AMZN) or eBay Inc. (NASDAQ: EBAY) - this looked like a viable option. Merger of equals. Merger of friends. This may have been the best option, although time seems to be running out for this one. Neither Amazon.com nor eBay have come forth. And Yahoo may not have asked either. The world would have welcomed an eBay - Yahoo merger. That may have been the lasting legacy of Meg Whitman. But alas. Not to be.
Will Yahoo ride into the sunset?
For this and related commentary on the pending acquisition by Microsoft, go to:
http://creativityandinnovation.blogspot.com/