Microsoft and Yahoo: On Again
January 9, 2009
Sitting at the eye doctor with my trusty Kindle (ruining my eyes, I know) I read “Ballmer Says Now Is time for Yahoo Search Deal” on the CNBC Web site here. Yahoo is not going anywhere. The CEO void remains. The Yahoo stock is in the run off stream from Old Faithful. If the CNBC report is true, the cyclic eruption of interest in Yahoo search is again visible. For me, the most interesting remark in the article was:
“We had a deal on the table that they didn’t choose to take, but I still think that makes sense,” Ballmer told the FT. “For us, the value to the customer, the value to the advertiser, all gets created around the search partnership.”
Since that time, Microsoft has lost Web search share as Yahoo treads water. Google continues to lead by a wide margin in the Web search NASCAR race. In my opinion, the Google vehicle is a tuned 2008 build. The Microsoft and Yahoo search systems are more like 1998 Chevrolets.
The deal may “save” Yahoo or deliver much needed emergency life support. But the Web search gap between Microsoft and Yahoo combined is too great to close with this deal. A leap frog play is needed. If this alleged deal goes through, I don’t think there will be a substantive change in Web search. Google, despite its numerous faults, remains more focused on search and its infrastructure. Microsoft and Yahoo have to catch up with today’s Google. Google is now leveraging its infrastructure to attack new markets. More is going to be needed to deal with the Google.
Stephen Arnold, January 9, 2009
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One Response to “Microsoft and Yahoo: On Again”
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Yahoo dictates you won’t buy into Google. When you have a wide margin, you often get the value that you’re losing. You’re going to make them, so all you can do is Yahoo with them when they happen.