Google, Yahoo!, and Microsoft, Oh My!
May 6th, 2007 by msdanielle
There’s a lot of buzz these days around the possible buyout of Yahoo by Microsoft. Their goal: a better chance of competing directly with Google. These three search engine and media giants have been fighting for much of the same audience in the last few years, but many analysts speculate that it was Google’s recent acquisition of DoubleClick that quickly catapulted Yahoo and Microsoft into revisiting previous talks.
All of these mergers and acquisitions are pretty much motivated by one premise: who can rake in the most online advertising revenue? But first off, all online ads are not created equal. Google’s display advertising (banners, branding, etc) has been underperforming, even though it operates within their hugely successful AdWords. To remedy this problem, they bought DoubleClick for a mere $3.1 billion. According to InfoWorld.com:
DoubleClick’s network of advertisers and Web publishers, as well as its technology to serve ads and manage campaigns, is expected to boost Google’s ad business, specifically for display and rich media advertising, which aren’t Google’s specialties.
Google generates most of its revenue from search engine, pay-per-click advertising, which are text ads that link to advertisers’ Web sites, but it has lagged behind Yahoo and others in banner, graphical, and video ads.
Now, Yahoo may still stand a chance to compete with Google in the display ad world regardless of a Microsoft buyout, since branded advertising is where Yahoo excels. But where Google kicks both of their butts is in search. Even if the second and third place search giants were to merge, they’d still trail far behind Google. The analogy that comes to mind is that of the US auto industry planning to introduce hybrid vehicles into the market. Could they replicate the technology of the industry’s leader, Toyota? Hell no. Instead, automakers licensed Toyota’s technology, allowing for greater competition in today’s market. Like the US automakers, Yahoo and Microsoft will lag behind in search technology, with almost nothing short of licensing Google’s algorithms to level the playing field.
Do you guys have an opinion on what’s going on? Please share your thoughts and feel free to leave your source and/or discussion links in the comments. For now, it’s 85 degrees outside here in LA, so I’m going to step out for some sun and a dip in the pool.
Discussions:
- MrGaryLee: Brainstorming Tips to Beat Google
- JohnChow: Microsoft to Buy Yahoo?
- DigitalPoint Forums: Yahoo to be bought by Microsoft
- WebmasterWorld Forums: MSFT to buy YHOO for $50 billion?
- SE Roundtable Poll Discussion: Is Google Headed Toward a Search Monopoly?
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Even if they will be a larger company to go after, Google still has better search and better contextual advertising. It will take some time and work for MS to catch up.
do you think they can catch up? i don’t know if it’s even possible at this point…
[...] John Chow. Her new blog site has some interesting stuff to read like a post on the rumor that Microsoft could buy out Yahoo! She talks about other stuff too, not just “webgeek” stuff. I haven’t checked [...]
all part of the power gimmicks. powerful want more power.