If will become a reality the 44 billion acquisition of Yahoo by Microsoft will be the deal of the year or maybe the decade but it will certainly not improve Microsoft’s (neither Yahoo’s) position in the ongoing war with Google.
Microsoft will loose a lot of money acquiring one of the internet’s dying pioneers. Yahoo was with no doubt the biggest succes of the internet of the 90’s. But now the 90’s are gone. We live a new experience where speed of innovation, speed of entering new markets is a must. And Yahoo isn’t too bright at that. This was demonstrated lately by the ever shrinking share of Yahoo (and Microsoft) from the internet search pie in favor of Google. In the US figures are not as bad as in Europe where Google’s dominance is astonishing. More then 90 percent in many of the countries. And these are the countries where internet advertising will grow more significantly in the coming years.
You could say that search isn’t everything. And yes, you’re right but on the content side Microsoft&Yahoo will never be able to compete with the content of tens of thousands web publishers who are part of the Google Adsense program. And building a system like that proved to be a disaster both for Yahoo (see the so called Panama project) and Microsoft. Even more Google not only is dominating this market in the english speaking world where Yahoo is actively present but it is rolling out this feature to more and more countries, to more and more languages. So in my opinion Google beats the so called Yacrosoft beast at both search and content. And what about the shrinking Office pie of Microsoft’s, thanks to the online alternatives like Google Docs? Need to continue? I guess not.
So how will this deal help Microsoft i ask?
Laszlo Bodor
