Like everyone else, (I think), I used to Yahoo. In fact I was a real hold out and didn't really want to switch over to Google. Alas thats years ago now and I rarely if ever surf over to yahoo's home page, use their search, or use any of their other functions.Flickr (great stuff) I generally don't bother with any of their stuff at all these days.
But now the inevitable has happened, Microsoft is in the ring surely pitting itself against Google through acquisition of existing market share. The internet is abuzz (as usual) with prognostications over the whole sorry state, and we are looking down the barrel of an extended battle to see whether a combined company will stand against Google and global domination; or whether three players will stay on the field.
But is it the right deal for Microsoft right now? (Or for Yahoo for that matter? What rights do the shareholders have in such a big battle like this? If successful will the future Internet company be a real player, or will it remain as marginalized as they both are today? And, finally, whats in it for us if it does go through?
Is search the end game anyway?
It sure was, thats for sure. But web based email used to be a hot ticket item back when Hotmail first came onto the scene; now everyone is doing it and it has lost its edge. MySpace was the big thing until Facebook got in the game; and then LinkedIn stole the march on businesses and professional networking from under both of their noses.
This happens again and again... particularly in technology.
- HD and Blu-Ray
- Laser Disc and CD-ROM (Does anybody even remember Laser Disc?)
- DVD's inexorable decline in the face of MP3 and other digital formats
- Betamax and VHS (The classic winner takes all battle)
It is definitely hard to see what is around the corner in any area of technology. But there are some trends that are hard to miss. An early emerging trend here is that of Vertical Search.
Fascinating stuff and well worth investigating. Vertical search takes in a number of areas from local searches, to industry specific and so on.
For example, our jobs board is built on the vertical search engine powered by SimplyHired.com. It allows you to search for a specific job, within a specific radius of any location in the USA. Pretty tricky huh?
Yahoo Local is getting close to the holy grail of vertical search by providing you with the ability to search businesses, products and services in your specific area. And there are lots more out there and a lot more to come. As technology becomes more mobile (so the thinking goes) vertical search will become not only in demand but a vital part of who we are evolving into. (And great for holidays too!)
But there are other games on the table also...
What about one of the other intriguing targets? Salesforce.com? Not a gigantic revenue spinner, (compared to some other options) but a darling of the SaaS world and a nice addition to the Microsoft stables maybe?
Or what about SAP, as has been floated in the news a couple of times recently? Interesting? Maybe...
While the business software game does obviously appeal to Microsoft, it doesn't grab their attention like anything with mass appeal does. And the masses are where its at. SAP is decades old, Google less than a decade. Which do you hear more about? Which do you see more of in your daily life? Even if you are an SAP user this is true.
And past successes are not inspiring to be honest. The great Plains software has not lived up to expectations and has not, as many predicted (Well.. I did anyway) swept the field of Enterprise software solutions. In fact, it rearely gets mentioned...
Microsoft Dynamics, the CRM offering to compete with Salesforce.com.. well.. its there. Haven't heard earth shattering stuff yet - but maybe its too early days yet.
No... Microsoft loves mass appeal. It grew up on it with Office, it capitalized on it with Hotmail and IE, and it is dying to be a real integral part of the growing web based economy.
So... sounds like a good idea then?
Well.. for who? For us, it's okay I suppose. You get more punch behind some of the Yahoo offerings, a competitor who can go toe to toe with Google on pricing wars for online advertising, and some of the innovative platform stuff that Microsoft will no doubt bring with it.
SO yes, it's a good idea. And the innovation wars will make things interesting for all of us for a while. But, they won't beat Google. They haven't so far, and I am sure that the Googlers are already thinking of ways to keep their nose in front.
Will they dent the market share? Seems inevitable, but they won't topple this king - at least not yet...
What is Yahoo Worth Anyway?
Less than Microsoft has offered. These guys are masters of the deal, without a doubt. How can that be when they offered more than Yahoo! was worth?
Have a look back at the Facebook deal. Before Microsoft moved, Facebook was in danger of being snapped up by Google (or somebody) for $2 - 3 billion. Microsoft made the deal, valuing facebook at several times that, and now it can't be sold. (And no doubt there are all sort of controlling clauses in teh details of the agreement.
Masterfully done!
Now they are using the Murdoch doctrine. Whats that? Recall the Wall Street Journal approach by News Corp? Big wasn't it? More than it was worth; leaving them with two choices.
Settle and give him the WSJ for a healthy premium over market, making all the small stakeholders in that family very happy.
Or don't settle and risk being torn apart by shareholders angry about the lost opportunity to get capital growth on their shares, as well as the potential collaborative benefits from working within the News Corp juggernaut.
What are Yahoo's options? Well they didn't take the deal, and their shareholders are up in arms. An overvalued deal refused based, presumably, on their belief that their brand is best served under the current management.
Lets ponder that thought for a minute..... nah! Doesn't hold water. They will have to prove it in court and the guys who lost the number one market share to an upstart with a weird name, who has gone on to monetize the web beyond Yahoo's wildest dreams, will not stand a snowflakes chance!
So the future is bleak for Yahoo now; hopefully they will rescind their rejection and take the price offered. Because if they do not they will be spending more time fighting law suits than fighting for market share. Either way, Microsoft will be better off than they are now.
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