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Can Microsoft-Yahoo Combo Topple Google?
By: AP   |   Feb 02, 2008

Unable to topple Google Inc. on its own, Microsoft Corp. is trying to force crippled rival Yahoo Inc. into a shotgun marriage, with a wager worth nearly $42 billion that the two companies together will have a better chance of tackling the Internet search leader.

Microsoft's audacious attempt to buy Yahoo, spelled out in an unsolicited offer announced Friday, shows just how much Google threatens the world's largest software maker's grip on how people interact with computers.

For Yahoo, the bid represents another painful reminder of how missed opportunities and mismanagement combined to open the door for Google to supplant it as the Internet's main gateway, decimating its stock price in the process.

Microsoft is trying to avoid a similar fate at Google's hands as more people access services and computer programs online instead of relying on packaged software applications.

Although Microsoft remains the world's most valuable technology company, its position will become more precarious unless it can cultivate a more loyal Internet audience and generate more online ad revenue to subsidize the free services taken for granted on the Internet.

Microsoft executives did not indicate Friday exactly what they would do with Yahoo's brand if their bid, now valued at $42 billion, is accepted. But analysts expect the combined companies to preserve many of their separate free services, like instant-messaging and email programs.

A more likely medium-term change is that some of Microsoft's Web content could fade away or get added to Yahoo, which has a vast collection of news and features aggregated from other providers.

Microsoft's web properties, including its Yahoo-like MSN portal, aren't exactly slouches: they rank third, trailing only Yahoo and Google, in total visitors. But while Yahoo still is profitable, Microsoft's online services are a consistent money loser. The MSN search engine is a laggard, even with recent efforts to soup it up under Microsoft's online umbrella it calls 'Live'.

Having Yahoo in its tent could give Microsoft a rationalization for abandoning its unprofitable online elements. "I think MSN folds into Yahoo," said Ian Campbell, CEO of Nucleus Research. "It would be foolish to keep that separate."

Perhaps the biggest change Microsoft and Yahoo could achieve together would be creating a better way to combine the web and desktop computing – not to mention cell phones, TVs, cars and any other gadgets that might someday plug into the Internet.

Consumers who access the Web on cell phones and handheld computers might be the first to find something new as a result of a Microsoft-Yahoo combination. Devices that run Microsoft's Windows Mobile OS could be better integrated with Yahoo content and possibly yield new services, like social networking functions.

New ideas will be key to compete with Google's web presence. After all, people don't 'Microsoft' or 'Yahoo' anything. Microsoft in particular tends to be tolerated more than loved. Google is also leading development of an alternative cellphone OS it calls Android.

Eventually, a teamed-up Yahoo and Microsoft might be able to rethink the PC desktop – where Windows still runs 90 percent of the world's PCs – so that Internet data such as stock prices, sports scores and weather are automatically baked in.

Microsoft might also use Yahoo's online strengths to galvanize web-based versions of some of its powerful desktop software applications, like Word and Excel.

Open-source rivals and Google are threatening to bite into Microsoft's lucrative Office software franchise with free versions of those kinds of 'productivity' software. Microsoft is developing web-based versions of its own, but slowly.

Now Yahoo could be the face through which Microsoft offers those online applications. Perhaps one day a Microsoft-fueled package of 'Yahoo Apps' will go up against 'Google Apps'.

Even with these possibilities, analyst David Mitchell Smith, a vice president at Gartner Inc., believes the biggest change from a Microsoft-Yahoo deal probably will be the one most web surfers don't notice. That will come as the companies try to broaden their ability to deliver ads all over the Internet, wherever it reaches.

It's necessary because being the most popular online destination (as Yahoo already is) is no longer enough. The explosion of blogs, video sites and other user-generated content has made Internet travels more wide-ranging. As a result, the biggest Internet companies now need their ad networks to reach far beyond their home portals.

Google has clearly mastered that, while Microsoft and Yahoo have not.

 
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Post a Comment on “Can Microsoft-Yahoo Combo Topple Google?”
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NO NEVER,I THINK IT IS NOT POSSIBLE!!!COZ YAHOO IS ONLY 4 FUN.N MICROSOFT IS A VERY HIGH N SHARP POINT.
DHUNNA @ Feb 04, 2008
There will be no effect on global IT seen, Internet is non primary business for Microsoft. They will continue to rule personal computing software at least for next 10 area. There is actually no competitor to MS tech in desktop OS, office application and Rapid application Development area.

Google on the other hand is leader in internet Technologies they have best search engine, Web mail, picture manipulation software. To me Google looks like innovators of new internet technology. In my opinion Google values Microsoft and does not want to compete directly with Microsoft in desktop software area. Hence will remain unaffected from the merger.
Rakesh Ranjan @ Feb 04, 2008
It cannot the combo will certainly create nuisance inspite of gaining any profit, might be possible yahoo user may shift their
loylaty to Google
RAJI AGARWAL @ Feb 03, 2008
And how much shall I have to pay for seeing the cricket scores on "MYahoo"??
lol.
Bhushan @ Feb 02, 2008
No it is not posssible
Dr R.C. Mishra @ Feb 02, 2008
@Sphinx
yup... ur rite
HiTmAn @ Feb 02, 2008
No chance ,because Google is better and faster than any other services.
Vipin K @ Feb 02, 2008
Hey Hitman...you forgot to mention.....the world will be renamed to "Google earth"..hehe
Sphinx @ Feb 02, 2008
even if Microsoft buys Yahoo!.. its not gonna save them

News Update:
Year : 2015
Google buys "Microsoft" for $10million
|--Google to make all Windows OS open source
|--Google announces there online OS
|--Google Launches there first Game console G-Box
|--Google Upgrades Google Earth (now u can see thru walls)
|--Google Launches next gen DVD format G-DVD (200GB SL)
|--Google buys nVidia for $5million
|--Google Launches G-Defination Graphic Cards
|--Google announces ISP service (100Mbps line)
|--Google buys Sony for $5million
|--Google upgrades G-Box to G-Station
|--Google buys White House for $50,000
|--Google to run U.S Govt.
..............
HiTmAn @ Feb 02, 2008
No chance! Google search is way better than Yahoo's or Microsoft's. Google's gmail is also coming very well. Microsoft by this possible acquisition are planning to concentrate more on advertising where Google has mastered it. On the web search they will have their hands tied to compete with Google's web search. As Jeremy mentions, it will turn out that way where Microsoft's internet services will be shifted to the Yahoo base.
Vshl @ Feb 02, 2008
IMO, Microsoft should offload ALL its Internet Technology groups onto Yahoo! creating a "new" "sister" company focusing _entirely_ on Internet Services i.e. Web Service Provider coupled with an R&D back-end. The "old" Microsoft (i.e. the parent company) *should* focus on the Home/SOHO and Corporate segments.
Jeremy King @ Feb 02, 2008
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