Microhoo: It’s Back in Time for Halloween
October 19, 2008
The run down: Google is explaining that its deal with Yahoo is not such a big deal and certainly not a tie up to worry advertisers, Web searchers, or monopolist alarmists. Yahoo has launched a new ad campaign to boost traffic to its search engine about the same time its shares fell to $12 or $13. Microsoft announces that Google Apps are not polished and steps up its pay for search ploy to shore up its sagging share of the Web search market. I am certain I have forgotten some other developments, but the real news appeared in the Washington Post here. The story, tagged as a Reuters creation, caught my attention with this headline: “Microsoft May Pursue Yahoo Search Partnership”. Additional information appears in Business Week here. This on again, off again deal pumped some juice into Yahoo’s sagging shares. For me, the most important statement in the story was: “The company may pursue a search partnership with Yahoo.” My thought when I read this item was, “So what?” Microsoft’s share of the Web search market continues to disappoint me, and I don’t have a stake in Microsoft. Microsoft’s executives must feel worse than this addled goose. I also considered the dust up in Norway. Norwegian authorities made an early bird visit to seize information, allegedly as part of an investigation into Fast Search & Transfer’s finances prior to the $1.2 billion buy out of the company by Microsoft. To top it off, Google just reported strong third quarter earnings garnered in the run up to the spectacular financial meltdown in September. Google shares jumped into the $350 range. Microsoft shares were at the market close in the $24.50 cent range.
Why my indifference? Three reasons:
- Few people seem to think much of my analyses that point out the hidden costs of a Microsoft Yahoo tie up. Microsoft is confident in its ability to normalize disparate platforms using its Monsoon and other hush hush technology. I don’t buy it, but everyone else seems to think that Microsoft has the technology to tame Yahoo’s years of technological promiscuity.
- The gulf between Google and everyone else in Web search cannot be bridged by hooking together old technologies. The difference boils down to Google’s building plumbing for a decade, refining its ad engine, and hooking users with relevant results. Time is running out so Microsoft has to leap frog Google. A deal with Yahoo is not a leap frog. Microsoft will be chasing Google carrying Yahoo. Google will just maintain or extend its leadership because it has not had significant competition for seven or eight years.
- Google is busy becoming the Internet. Again few attend to the technologies revealed in its technical publications and patent documents. Google can tame the wild Internet stallion, and no other company is in a position to do this. Search results and services delivered from Google without Google’s having to pass the request anywhere other than to itself will deliver performance and the clean and shiny Internet some people want. If Google is the Internet and the Semantic Web, the gulf may become too big so a leap frog play is essentially impossible.
I will monitor this Microsoft Yahoo tie up. If it happens, okay. If it doesn’t, okay too. As I said before, time is running out in this consumer information access sector. Agree? Disagree? Bring you facts and educate me.
Stephen Arnold, October 18, 2008
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