Microsoft’s and Yahoo’s Partnership
Just recently I covered Bing.com and said that “I don’t think Google has to count its numbered days just yet.” So has my opinion changed since Microsoft recently announced its partnership with Yahoo? Yes and no.
It’s About Time
A Microsoft/Yahoo partnership was about as surprising as the ending of the latest M. Night Shyamalan movie after the big mouth in the cubicle next to yours just has to tell you how it ends. It wasn’t so much a question of if it would happen, but when… Well, there were a few false starts that made more than a few wonder if the “when” would ever happen. But most of us figured that both sides had the business savvy to know it had to happen, that it was just a matter of ironing out the details—the greenback kind of details.
Okay, so it wasn’t as simple as all that. Frustrated Yahoo shareholders, a threat of a “hostile takeover” by Microsoft CEO Steve Ballmer, a rebuttal by Yahoo that they were going to partner with Google instead, Yahoo basically saying “Sure, we’ll partner with you, but not until you ask nicely—and stop ‘undervaluing’ our brand by offering a mere $45 billion,” stockholders kicking former Yahoo CEO Jerry Yang to the curb (or just into another office)… There was a lot of drama leading up to this decision.
Maybe the merger decision finally went through because they decided to focus on combining one single service, the place where it makes the most sense: search engines.
Hope for Bing?
So why does the search engine merger make so much sense? Because Microsoft certainly doesn’t need help with much else and Yahoo seems keen to keep some of its independence. Google blows its competition out of the water when it comes to the global search engine market share. After Baidu, a Chinese search engine, Yahoo trails next after Google with Bing behind that.
Although the search engine merger makes sense, I still don’t think it spells search engine success for either company. Shareholders seem to think the same. The merger was announced to a total lack of fanfare by the stock market, as Yahoo’s stock dropped 12% the day after the deal was announced—60% less than it was when Microsoft and Yahoo were talking merger last year. Why? Because Google dominates 78.5% of the search engine market share globally and Yahoo and Bing combined get just a little over 10%.
No matter what Yahoo and Microsoft concoct for the new, advanced, united Bing, I doubt many Google users are going to care. Short of Google growing lax in development and function, very few things are going to entice the Googler to leave their comfortable home and change the way they search for things. Google’s already way ahead of the game—and it’s always innovating to make itself indispensable to its users in as many ways as possible, as the many Google iPhone apps will attest.
Bottom line is, I don’t think this merger spells doom for (or even warrants a second glance from) Google anytime soon—but it’s the best the two companies can hope for. For the extent of the 10-year deal between the two companies, Yahoo can spend less time on innovation (leave that to Microsoft, who’s happy to tinker with this or that) and Microsoft can grab a hold of Yahoo’s audience and ad revenue.
The more advanced the competition is, the better the market becomes, and we, the consumers, win. You can’t complain with that!