Microsoft / Yahoo Merger Off: Ballmer Walks Away

Well, it's over, thank goodness. Microsoft has walked away from their unsolicited bid for Yahoo. Whew! Deep sigh of relief from many Yahoo senior employees. But predictions are for an ugly day on Wall Street for Yahoo Monday morning - with a potential return by Microsoft with a lower bid after Yahoo tanks in the markets.

It's frustrating to those of us who love search to watch this epic battle, knowing that Microhoo may yet emerge from the burning embers. I commented in my last post that the Yahoo Open Strategy announced by Ari Balogh last week at Web 2.0 introduced some exciting prospects for the future of search if they can successfully pull it off and Microsoft doesn't win the merger through a lower offer and proxy battle. Well nobody has even commented in the news about the effect the YOS could have, not even Microsoft.

Maybe I'm way off base with this one, but I'm going to stick to my assertions until we see how this all shakes out. If Yahoo survives to stand on it's own and can put together the strategy for opening up their entire network to developers in a sweeping move like they've outlined - I predict that Yahoo could overtake Google in two years - but only if Google stands still and watches - which is not likely either.

Danny Sullivan has an excellent analysis and commentary on the Microsoft / Yahoo / Microhoo battle. I'm surprised that he didn't bring up Yahoo Open Strategy either - is it because nobody expects them to survive to see where that could take them? What if the merger happened - would Ballmer nix YOS?

I'm no Yahoo fan. I've disliked their strategy for years, I hate how they buy up companies and then kill them off or let them die within Yahoo, I can't believe they didn't leverage GeoCities and Yahoo Groups to become a social networking leader. I'm astonished that they aren't more profitable than they are because they emphasize monetization above audience satisfaction and utility. (Yahoo mail still doesn't allow pop access unless you pay for it when gmail allows this access, even using imap.) So I don't use my Yahoo mail account except to log in to the few services I use like MyBlogLog, Yahoo Groups and Flickr.

The public seems completely uninterested in the whole thing if Google Trends is any indication. The chart showing searches for the story and news stories seem to drive little interest. (click to enlarge)

Uploaded with plasq's Skitch!

Well - I will once again throw out a cautious cheer for Yahoo and hope that they survive the Wall Street rollercoaster to pursue Yahoo Open Strategy as it is their best hope for a true contribution to search. Without YOS - it's over for Yahoo IMHO.

YahooSoft or MicroHoo! How to Beat Google

MarketWatch discussed the merger talks between Microsoft and Yahoo today. The states headline states flatly 'YahooSoft' not enough to take on Google!

That analysis is no doubt galling to both companies. Both have failed to gain significant market share of search, despite what seems like endless acquistions activity by Yahoo and confident Microsoft promises to build their own better system for search.

MSN was stung by Google's winning $3.1 billion bid for DoubleClick last month (even though MSN reportedly made a higher offer) and while Yahoo countered by buying another Ad server, Microsoft counters by offering once again to buy Yahoo. Fact is, neither approach is likely to work to wrest control of market share from Google. My favorite quote from the MarketWatch story is:

"Here are two companies that are bad at the same thing," said Scott Kessler of Standard & Poor's. "With a merger, you get one company still bad at doing that same thing."

Wow, that about sums it up. But what is the solution for the two? It seems odd that the #3 player is talking of buying the #2 player and combined (a generously estimated 38% combined total), their reach would still smaller than the competitor they both want to take on.

I've poked fun of both Yahoo and MSN for years for various reasons, most have to do with a lack of focus or for putting monetization above utility of tools and services and all of their flailing about.

It's simple guys. Build or buy a great service, not a service designed to take market share, not a service you can leverage to beat the competition, not a service that mimics Google - just build something that works well and that you have a passion for. Something that is just too cool and everyone wants to use. Make it popular first, THEN monetize it Are you listening Yahoo? Or is it going to be MicroHoo?

Mike Valentine is an SEO Specialist offering occassional commentary on Search Engine Developments through his Reality SEO Blog and developed WebSite101 Small Business Ecommerce Tutorial in 1999 to help educate the little guy to the intricacies of online business.