MICROSOFT BIDS FOR YAHOO TO TRY AND TAKE ON GOOGLE
Microsoft has just proposed to buy Yahoo for approximately $46b, a 61% premium over its current market valuation.
A clear and stated goal is for Microsoft to try and take on Google. This will be a multi-pronged attack on search, email, display, maps, local business listings, photo sharing, social networking….
From a search point of view, it will be interesting to see what happens with Search technologies. Live Search has come a long way and is a much better product that previous versions, but it’s still poorly regarded, basically because it’s too easy to manipulate the results which leads to poor quality search results.
From paid search point of view, it won’t make much difference to advertisers in Australia – Live search uses YSM results anyway. From a natural search point of view, a consolidated Live/Y! search engine might make life a bit easier as it’s one less search engine to worry about. But, under the current arrangement, despite Google dominating the market, even if you don’t rank well on Google, there is still reasonable traffic from Y! and Live (depending on your category). With just 2 major players, it will be vital that your site is geared for good rankings on both.
One comment
sam said: (on February 4th, 2008 at 11:07 am)
In the long run, this merger isn’t necessarily about search profit (although it would be nice to dream). Software distribution, not advertising revenue, is Microsoft’s core business.. and this is slowing dying as the web browser eats up the entire machine. Google is already playing in Microsoft’s space with a suite of free, web-based apps and as they improve we’ll figure out we don’t need to buy instantly-outdated MS office.
Meanwhile no one will care what the underlying operating system is because they will actually never run any software outside the web browser. Bill Gates has previously stated this and recognizes it.
One other speculated area of importance for Microsft is the scarcity of quality human IT resources and access to Yahoo’s Silicon Valley campus (which is conveniently located just down the road to Google, where they hope to attract disgruntled staff).
For Microsoft, this merger is crucial. If it fails, they may even raise their share price offer but they must get into this space to survive.