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February 4, 2008

Could Google Save Yahoo from Microsoft?


Even if it's hard to believe that Yahoo will accept it, there's a simple way to make Yahoo more profitable: drop its search advertising service and use Google AdWords. Google has a better technology for ranking ads, a bigger inventory and higher click-through rates. If Google accepts to offer Yahoo most of the earnings, it's likely that Yahoo's profits will make investors happy again.

According to Wall Street Journal, "Google Inc. Chief Executive Eric Schmidt called Yahoo Inc. CEO Jerry Yang to offer his company's help in any effort to thwart Microsoft Corp.'s unsolicited $44.6 billion bid for Yahoo, say people familiar with the matter. (...) Google could play a role in attempts by others to outbid Microsoft, or by Yahoo to remain independent. Google could potentially offer money, or guaranteed revenue in return for a Yahoo advertising outsourcing pact, under that scenario."

There are rumors that Yahoo already negotiates with Google the outsourcing of its search ads in Europe. This could be a good news for Google, who also provides ads for Ask.com.

In a harsh post from the official Google blog, David Drummond is worried that Microsoft's acquisition of Yahoo could jeopardize Internet's openness: "Could Microsoft now attempt to exert the same sort of inappropriate and illegal influence over the Internet that it did with the PC? While the Internet rewards competitive innovation, Microsoft has frequently sought to establish proprietary monopolies -- and then leverage its dominance into new, adjacent markets. (...) Microsoft plus Yahoo! equals an overwhelming share of instant messaging and web email accounts. And between them, the two companies operate the two most heavily trafficked portals on the Internet. Could a combination of the two take advantage of a PC software monopoly to unfairly limit the ability of consumers to freely access competitors' email, IM, and web-based services?"

It's not clear if Google is truly worried by this potential acquisition, since a Microsoft+Yahoo company would be very far from Google's dominant position in search and search ads*, while Yahoo's absorption would take a lot of time. Microsoft has already admitted that it can't compete with Google online by trying to acquire Yahoo and it chose a very bad moment in Yahoo's history to force the acquisition.

* According to Microsoft, Google gets 75% of worldwide revenues in search ads and has 65% search market share in the US and 85% in Europe.

17 comments:

  1. Hold on!! Does Yahoo want to be saved? Are we sure about that?

    As I said somewhere else... Yahoo! has given the signal that they want to be bought with the laid offs, right? And just a few days before MS announcement! C'mon! This was all prepared by both of them!

    We all know that in business the kind of signal provided by Yahoo! Is like the one a lady gives you when she is waiting for you half naked, layed down in bed...

    There's no mistake here! Yahoo! is waiting for Bill with their best night stuff on!

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  2. Yahoo's clearly inviting something, for sure.

    However, the key here is that the other companies at play here are offering it *money* to "save" itself.

    Yahoo could just as well be- to extend your analogy here- kissing the rival of its intended suitor just to make him jealous!

    Not to mention, if Google/any potential corporate allies thereof honestly comes up with a sweeter deal, Yahoo will abandon any previous intentions in a heartbeat. Corporations aren't lovers, they're whores.

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  3. DON'T DO IT GOOGLE. DON'T. Screw Yahoo. I hate Yahoo (if you can't already tell). My mom and dad always told me that if you hang with the wrong crowd you will eventually become one of them. If Google even attempts to "help" Yahoo they will be inviting themselves into a time of heartache.

    I'm sure Google could definitely help Yahoo, but who cares? Yahoo needs to crumble. I've hated Yahoo ever since they cheated me out of $200+ dollars from "trying" their CPC advertising. This may not seem like a lot to everyone, but it's a lot to me.

    I HATE YOU YAHOO AND ALWAYS WILL.

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  4. I'm still mad a Yahoo for buying Flickr! I wish Google would build something as good or better than Flickr, but they don't seems to want to put any real effort into it.

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  5. Hey, guys, please don't give up to hates. I know you love google as I do.

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  6. ppl love google for what it does,google is the only hope for yahoo in same space where it is operating to get out claws of big ugly fish(Microsoft)

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  7. With Microsoft 95% PC share globally, running Microsoft based OS... referring to "THE harsh post" ... THE Google. Dang you Google!....

    Google, you actually exists because of Microsoft's So called "Monopoly" and "Closed Ness!". You should reconsider opening up your search engine code and then talk about Closed micro-hoo internet.

    Google, You do not exist without Microsoft in first place....Imagine Google Services being used only on Apple And Linux...

    Have some respect go Microsoft you guys!...

    The very posts/comments that users are commenting are through PC's .... and not through Apple or Lin*x based machines.

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  8. Yahoo might be Bill's brainchild but the email of Yahoo sucks because you get a lot of spam. Whereas, w/ Gmail, no spams because it filters them. I've been using Yahoomail ever since but I just had to switch to Gmail.

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  9. @Anonymous
    I don't see any problems when imagining Google being used only by Apple and Unix based systems, so I totally disagree with you that Google exists because Microsoft exists.
    People just choose Microsoft Windows because it's the easy solutions they got used to, this doesn't mean that it's the only solution.

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  10. I think that Microsoft is making a bad decision for strategic reasons to acquire Yahoo. Maybe one should just let them waste their $40+ billion. further thoughts are at http://sophisticatedfinance.typepad.com/sophisticated_finance/2008/02/microsoft-yahoo.html

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  11. Bullshit! Big bad mean Microsoft? Give me a break!

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  12. I see a lot of yall hate Yahoo too! Yall are my peeps!!! Oh by the way, Microsoft can you fix Vista (your piece of crap OS)? Sorry, I had to throw that out there.

    LIVE ON GOOGLE!!!!!! Woot!

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  13. Yahoo the leading giant in the internet can tie hands with Google. But for any reason merging with Microsoft will not be healthier for the future of web.

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  14. I think google will not bid for yahoo.Its just like when you have an insurance sites and youre trying to bid for screensavers site.Microsoft and yahoo have similarity in seach engine algorithm technology while google is very different from msn and yahoo.


    satellite image of my house

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  15. i think microsoft sucks..and if ms buys yahoo...then yahoo will suck too.. i think yahoo should try to maintain its status, and continue its independence..

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  16. If they get bought, fine. I'll just drop my Yahoo email account and never do any business with them. Just like I do with Microsoft. DON'T BUY THEIR CRAPPY PRODUCTS! Microsoft is in the business to make money. Not to make the internet a better place OR to make a good operating system.

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  17. This is really old but by now Microsoft has bought Yahoo, well damn it just like everything else MS touches, yahoo now sucks. BAD!!!

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