Microsoft-Yahoo Deal Raises “Troubling Questions” Says Google

February 3rd, 2008 at 12:39 pm

He does raise some good points… but you are right Google really has no reason to complain at all.

February 3rd, 2008 at 12:46 pm

I think regulators would laugh at Google at this point. What a joke. Sounds like sour grapes to me. GO M$

February 3rd, 2008 at 12:51 pm

I think it is obvious that google does not want to seem happy about this. (although they have every reason to be) Additionally, if they can get yahoo’s or microsoft IM/email branches to be sold off before the merger as a regulatory term for the deal to go through, even more power to google. These are the two aims that this blog posting (and i assume the general strategy Google will follow in terms of this aquisition) serves.

Apart from this, google having a superior position in search/advertising doesnt stop them from pointing out potential problems with the email/IM side of things. If the argument is valid, then whay does it matter where it comes from? Isn’t attacking the person (or organization) with the opinion instead of the opinion itself considered an ad hominem attack and hence a form of bias?

February 3rd, 2008 at 12:52 pm

This from the same company that sued Microsoft over *desktop* search on its own OS?

I’ll say it again as I’ve said it before: Google is a one-trick pony. Granted, it’s a hell of a trick, but it’s not worth $700 per share, as “the market” has already figured out. And while I’ll grant you that the geek set gets worked into a lather over GMail, Google Earth, and Google Gears, the fact is that not one of Google’s products other than search (and maybe Google Maps) has really resonated with the average Web user.

Yahoo and Hotmail both have more users than GMail, and both have consistently out-scored GMail in recent (within the past 18 months or so) tech lit reviews and end-user surveys.

Google has been rightly taken-to-task for the very poor job it’s done supporting and updating Blogger.

Orkut - what can I say? I don’t speak Portuguese. And neither do most of the people on Earth.

Google Answers - dead.

Froogle - dead.

GoogleTalk - used by a subset of GMail users (see above).

iGoogle - also-ran start page. Pageflakes and Netvibes gets better press, and MyYahoo! has a larger user base.

Picassa - Nice. Also acquired. Also primarily a client application - you know, those legacy things that Microsoft is derided for by all the Google fanboys who know the future is the Webtop, not the desktop OS.

Android - vapor-ware. YahooGo! 3.0 is already here, and runs on Windows Mobile 6, the dominant smartphone OS.

OpenSocial - vapor-ware. All participants are also-ran social networking sites.

Google isn’t everything it’s cracked-up to be, and Google knows it. This is the proof.

February 3rd, 2008 at 12:58 pm

“It’s about preserving the underlying principles of the Internet: openness and innovation.”

In that case can someone tell me what the revenue share is between Google and AdSense customers?

February 3rd, 2008 at 1:00 pm

Duncan,
Stop using your space on techcrunch to please Arrington by playing his favorite game- Google bashing
There is not an iota of value that post adds to the main conversation. And it just makes you look (or prove) that much more stupid.
Techcrunch is getting sicker and more and more worthless by the post.

February 3rd, 2008 at 1:02 pm

Love or hate Google, I do think they take “internet openness, choice and innovation seriously.” These are valid concerns that do need to be addressed.

February 3rd, 2008 at 1:12 pm

in Aikido they say that the best defense is no defense..and G goes further

February 3rd, 2008 at 1:14 pm

Duncan, I’ve read the letter and I don’t see anywhere in there where they said that a Microsoft and Yahoo combination would hurt Google. In fact I think such a merger would tickle Google pink with the almost certain promise of Yahoo and Microsoft failing miserably. However, they are correct in the thought that such an enormous web mail combination could raise privacy fears (especially in Europe where they hate Microsoft already). In terms of this being anti-competitive for search, I highly suggest you talk to insiders at Ask, Wikia, Powerset and others. They don’t have a hope in hell of making any headway in the search market. I can’t imagine that they are happy about this. Microsoft won’t hurt Google but it will hurt the rest.

Keep in mind that Google was not the first search engine nor were they the pioneer of the PPC advertising model. They were and still are innovative and built a better system and gained a “natural” monopoly. By giving the people what they want, they became a giant and global favorite. Now with the possibility of 2 companies having around 90% of the search engine market, the possibility of someone becoming the next Google is laughable.

Microsoft on the other hand can’t innovate to save their life. Everyone is sick and tired of them and most people want this deal to go through just so it will be the final nail in a heavily bloated coffin. Does anyone actually think Microsoft is a genius for wanting to buy Yahoo? It reeks of desperation. The all mighty Microsoft can’t compete because they have a terrible search engine and no one wants to use it. Yahoo should stick it to them, forget the deal and watch Microsoft writhe like a fish out of water. Accept the deal, watch the thousands exodus from Yahoo to Google and the combined company still won’t have a chance at dethroning Google.

February 3rd, 2008 at 1:16 pm

given that MSFT’s real interest is search and the ad network, Y! could easily spin off email and IM to mitigate the possibility that this raises any DOJ eyebrows

February 3rd, 2008 at 1:27 pm

no news and nothing to see here… just some (mild) posturing by google to eke out some concessions. Standard stuff every competitor does in an situation like this.

February 3rd, 2008 at 1:30 pm

Not to make this an investment site…but do you think msft will end up paying more then the $31 a share based on the over all price already dropping based on the price of msft shares which will be part of the pay off to yahoo share holders….and does anyone think Rupert will jump in?

February 3rd, 2008 at 1:32 pm

MS is a convicted monopolist with a pretty bad track record. It still has pending antitrust lawsuits against it.
Google isn’t a convicted monopolist, or has any anti trust lawsuits against it. I know you guys love to call Google a monopoly but since when getting 60 % of something (search) make it a monopoly. Don’t you have to have like 90% to be a monopoly

Us regulators have already oked the Double click deal and according to reuters, the EU will do so too. Plus EU is more concerned about privacy issue related to the deal and not how big they would become.

I don’t see the sour grapes stuff here, it’s a valid concern

February 3rd, 2008 at 1:40 pm

Every compatitor will afraid a merge like that…

So google make his job to avoid it…

February 3rd, 2008 at 1:49 pm

Its not only about search…

Yahoo and Microsoft control almost 90% of the webmail industry when you combine Yahoo! mail, Hotmail, MSN, and Live.

Similarly, Yahoo and Microsoft control a similar share of the instant messaging services. The industry has finally began to interoperate with IM protocols, such as the deals with Google’s adoption of Jabber (an open protocol). Does anyone really believe Microsoft would not leverage the massive IM marketshare after aquiring Yahoo! to block interoperability and open standards?

Its not just search…

February 3rd, 2008 at 1:54 pm

Let Yahoo! and Microsoft merge and combine their search market share, but I hope regulators force Yahoo! to first divest their IM and Webmail services to prevent Microsoft from gaining monopolies in two more services that Internet users depend on….

A good deal for internet users, would be to sell off Yahoo! IM and WebMail and other services to IAC, then sell the search and advertising pieces to Microsoft. It would create more competition and avoid creation of damaging monopolies.

February 3rd, 2008 at 1:58 pm

@17 - I second your suggestion.

Them and the people who continuously point out non-material typos and mispellings.

February 3rd, 2008 at 2:04 pm

This is just as interesting as Google + DoubleClick. All major mergers should be looked at, regardless of who or what.

February 3rd, 2008 at 2:13 pm

There is one very smart point being made here (Kelli if I may quote):

“Duncan, I’ve read the letter and I don’t see anywhere in there where they said that a Microsoft and Yahoo combination would hurt Google. In fact I think such a merger would tickle Google pink with the almost certain promise of Yahoo and Microsoft failing miserably.”

The odds of Microsoft failing to monetize on the new assets is quite big. It gives them greater critical mass of users but the questions really remains how will they intend to make it return, Yahoo hasn’t been doing a very good job on that, MSN has been little more successful. Google has a great cash cow in paid search as long as it lasts but I think there is change on the horizon and it may not come out of Google.

I don’t like the idea of the takeover because it brings us closer to the question if internet will or can remain free for everyone.

February 3rd, 2008 at 2:58 pm

The key is the $6.4 billion in search revenue Google makes compared to 2nd place Yahoo with $1.6 billion.

February 3rd, 2008 at 3:13 pm

I think Drummond raises some real issues that have to be taken seriously. I think there will be more innovation in the web space with Yahoo!, Microsoft and Google competing than with with just two players.

But long term Microsoft/Yahoo! could pose problems but not straight away because I think Google is far ahead already esp. in search revenue terms.

February 3rd, 2008 at 4:57 pm

@38 EJB of course you can quote and that was my point. If this goes through, this will result in big layoffs as any M&A does and where will those smart people go? Google or Facebook. They will also lose the super smart kids coming out of Stanford to Google or Facebook.

Microsoft has always made complimentary acquisitions but this is the first time they are making an acquisition of a company exactly like it (and better than it). They will have 3 search portals, 2 major webmail destinations, 2 financial portals, 2 IM clients, 2 dating websites and of course, 2 ad platforms.

Please keep in mind who is making the offer. Microsoft said in their teleconference that they love the Yahoo brand, they didn’t say anything about the technology. The odds of Microsoft buying Yahoo then using all of their technology is unlikely, they will be cutting a lot of areas from Yahoo. Any bumbling will only force people to Google for everything they went to Yahoo for.

February 3rd, 2008 at 9:19 pm

Regarding Microsoft’s Bids to Buy Yahoo

Microsoft CEO Steve Ballmer is presently under the influence of Neptune “negative” Jupiter. This influence governs the unrealistic, impractical, and shows no workable plan for success, the influence is purely emotional. This influence also shows a disregard for morals, ethics and values, which reflects the “take over” tactics of Microsoft as Yahoo begins layoffs and restructuring within. The chart of Steve Ballmer indicates that he is making a “big” mistake in timing and planning that will harm Microsoft.

February 3rd, 2008 at 11:31 pm

@39 Isofarro: you’ve completely mis-stated the “lock in” argument. Whether or not Yahoo or MS uses a proprietary implementation for IM is irrelevant — it’s whether or not they allow other networks to pass messages back and forth. Remember years ago when MSN and AOL were going back-and-forth on a daily basis with authentication jumps to each other’s networks?

The fact that Google uses a published protocol means squat — you still have to authenticate to their servers. The fact that Yahoo and MS use their own dedicated clients is as irrelevant as is the capacity to create your own client for Google. (Never mind how many people are actually going to do this…)

The lock-in is at the server, not the client. And no one on the above list is in any different position from the other.

February 4th, 2008 at 1:05 am

someone I think is afraid

February 4th, 2008 at 7:08 am

@48 jro: “Isofarro: you’ve completely mis-stated the “lock in” argument. Whether or not Yahoo or MS uses a proprietary implementation for IM is irrelevant — it’s whether or not they allow other networks to pass messages back and forth. Remember years ago when MSN and AOL were going back-and-forth on a daily basis with authentication jumps to each other’s networks?”

Not passing messages across each network is only one part of the problem. Yes, its an important problem from IM using people, but that alone doesn’t solve the issue of the lack of innovation on messaging platforms.

Its very easy right now to build PHP client to converse with a PHP server over Jabber. That opens up interesting possibilities of distributed applications. Writing the same application to work inside Yahoo’s or Microsoft’s IM network - not possible outside of their respective Product Groups.

A gateway between the IM networks doesn’t solve the problem, it just means that automated IM clients and servers can practically only be written to work with Jabber.

Of course, with Google’s GTalk client built into GMail, all the Jabber clients and servers I wrote in PHP just worked. That’s openness, and that’s how openness doesn’t stand in the way of innovation.

February 5th, 2008 at 4:06 am

afaik, a 1000 pound gorilla would be morbidly obese. not really scary…