Microsoft Yahoo deal finally complete, but not the merger it once was
By Sean P. Aune
After years of speculation and rumor, Microsoft and Yahoo have finally reached a deal to pool the collective resources of the companies, but it isn’t the deal we had expected. Back in late 2007 rumors began circulating that Microsoft was attempting to buy Yahoo, which would allow the two entities to combine their search engines in the hopes of catching up with Google. However, much to just about every analyst and board member’s amazement, Yahoo rejected the offer. This led to major shake-ups in the management at the former search engine giant, and led to everyone scratching their collective heads as to what the two companies would do without one another. Rumors continued to circulate that some sort of deal was still on the table, but it was beginning to look more and more like Yahoo would give over its search portal to Microsoft, and that Yahoo would be the sales force behind selling ads on both portals. This was indeed the final shape that the deal took as it was announced this morning, and thus brought an end to the age of Yahoo as a search engine company. While analysts all over the Web are still trying to decide just how good of a deal this is, one thing is clear in that Yahoo’s fortunes are now completely out of its own hands. Carol Bartz, CEO of Yahoo, stated in a blog post on the deal:
Competition equals innovation. But with (Google) dominating 70 percent of search, that field has been pretty lopsided. This transaction will create a healthy competitor that’ll keep everyone on their toes.
The problem is that it was 30 percent competition before the deal, just broken over two companies, and it is still 30 percent competition after the deal. The possibility that this is going to put any larger of a dent in Google’s stranglehold on search looks to be more wishful thinking than reality. Advertisers on the other hand will be a bit more of a winner than anyone else as they will only have to deal with one company now to put their ads on two portals, but by the same token, they might also see an increase in rates as the audience has now been expanded. Of course, all of this may prove to be moot as the deal is likely to draw investigation from the Justice Department about the possibility of anti-trust hiccups. In short, this isn’t going to be an over night deal, so it will be some time before we actually see the results of the deal. Of course, that isn’t going to stop an endless stream of blog posts on how this will impact every day use of the Internet.
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July 29th, 2009
This agreement would definitely provide a much needed momentum to Bing in terms of traffic as large scale traffic is mandatory in order to learn what people search for. Its tough to say for now that whether this move would eat away Google’s market share but without doubt this will be good for consumers as competition is always healthy