Does the Microsoft-Yahoo! Merger Threaten Google?
For weeks now, analysts and armchair financial nerds have been mulling over what it will mean if software megacorp Microsoft buys Web monkey farm Yahoo! Would Microsoft-Yahoo! (known forevermore as Microhoo!) challenge Google to some kind of Web domination duel and win? Probably not. As much as I would love to see Bill Gates, Sergey Brin, and Jerry Yang in some kind of unholy three-way Jell-O wrestling match, I know it will never come to pass.
Microhoo! won't ever have what Google has right now. Sure, Microhoo! will have some solid assets: control of most PC desktops with the Windows OS, Microsoft Office crap, and the Internet Explorer browser. After chomping up Yahoo!, Microhoo! will have a second-rate search engine used by a forlorn 22 percent of Web searchers, followed by a very confused 10 percent who use Microsoft search -- I bet you didn't know Microsoft even had a search engine, did you? It would also have a giant mess of users on free Yahoo! mail, as well as Yahoo! instant messenger. Plus it would acquire a host of Yahoo! things you also didn't know existed, like Yahoo! Buzz and Yahoo! Answers. Along with about 8 percent of the Web advertising market.
What does Google have? Sure, it has a million things like Android and Orkut and Gmail and Reader and Blogger and Scoop and Zanyblob. But what it really has is Search. Fifty-nine percent of online searches go through Google servers. And if it can sell ads to 59 percent of the billions online? It owns the attention of the majority of the market. Google wins. That's why the company isn't worrying so much about Microhoo! and instead is doing things like investing in alternative energy research and letting its employees make psychotically long, company-wide e-mail arguments about whether it's Earth-friendly to provide plastic bottles of water in the lunchrooms.
I shouldn't be so glib. Google is making a halfhearted attempt to prevent Microhoo! from being born. The company offered Yahoo! an ad-sharing partnership where the two could pool their networks, put more ads in front of more eyes, and come out as an even more giant advertising machine. They're doing a very limited test of the ad partnership over the next couple of weeks. Maybe we'll see a Goohoo! after all.
I don't think so. Most business pundits think the Goohoo! deal is just Yahoo!'s last-ditch effort to get a bigger offer from Microsoft. Apparently Yahoo! wants about $50 billion to become Microhoo!, and Microsoft is currently offering a little more than $40 billion. No matter what the price tag, my bet is that we're going to see Microhoo! by this time next year. Microsoft is even contemplating a hostile takeover -- that's how serious the situation is.
So what does Microhoo! mean for us, the little guys, who just want a nice search engine that helps us find "hot XXX pussy" or "free MP3" on the Web? For one thing, it means we'll have fewer options when it comes to online searches, using Web mail, and just plain goofing around online. Microsoft actually considered bringing News Corp, owners of MySpace, in on the Microhoo! deal. That would mean MySpace, Hotmail, Yahoo! mail, and your PC software would all come from a merged corporate entity.
Let's say we did get a Micronewshoo! It's online offerings, combined, would be very much a version of Google's online offerings: mail, social networking, search, Web fun. There would be no cool new thing, no sudden breakthrough application that would transform our relationship to the Web the way Search did. It would be more of the same stuff, but from fewer players -- and therefore blander and bigger, like Hollywood blockbusters. New applications and content creators on the Web will be incredibly hard to find unless they have a deal with Microhoo! or Google.
Then in 20 years, a woman in a physics graduate program in China will come up with an idea for the next cool communications network. At last, we'll say, we finally have a network free from advertising! A place where we can share information without Big Business intruding! Not like the Web, which is all corporate content and has no place for the little guy.