The Search Industry Set to Join the Sourcing Brigade Soon
The “Yahoo vs Google” story seems to be converting into the “Yahoo + Google” story. It seems that the fear of its acquisition has pressurized Yahoo, one of the world’s leading search engine companies, to provide search services to its all-time rival Google, although there may be some other reason behind the Sunnyvale, CA-based Yahoo’s move. A recently published article on AFP reveals that “Yahoo, after years of battling Internet rival Google for online advertising, has said it will launch a limited test of Google’s AdSense for search service. … The test is expected to last up to two weeks and will be limited to no more than 3 percent of Yahoo’s search queries. The program will deliver Google ads alongside Yahoo’s own search results.” Many analysts are reacting to this in different ways—some are debating the Yahoo–Microsoft battle, while others are analyzing the Yahoo-Google deal.
Jeff Lindsay of Bernstein Research told The Washington Post that “Yahoo’s proposed trial of search with Google is a shrewd move that could significantly complicate Microsoft’s unsolicited bid for Yahoo.” Lindsay argues that if the trial is successful, the path will be paved for Yahoo to justify a $40-per-share valuation. He also makes an important note about why Google is willing to make this move now, when it had expressed concern previously over antitrust issues: it can show more verve now that its DoubleClick acquisition has closed, and it need no longer worry about regulators’ scrutiny. For Microsoft, the deal makes sense only if Yahoo’s valuation is $35 per share.
In a recent statement, Google’s CEO Eric Schmidt said, “Nice to be working with Yahoo,” but stopped short of detailing how far negotiations with Yahoo had gone or how likely they were to lead to an actual business partnership. Now that Google and Yahoo are set to ink an ad outsourcing deal, this move points toward something else: the merger (sooner or later) of the world’s two Web giants.
I am studying this very thing, do you mind if I quote you? If so I will credit this page, and you, when I publish in the summer.
Yahoo and Google appear to of dismissed any threat from Microsoft, maybe on its own Microsoft id dead. Today’s the launch of Googles new web browser is an indentation that Google, is set to greatly increase its ability to monitor and track all user web activity. This will enable Google to control internet advertising beyond what I would call fair trading. Allowing only larger companies with big advertising dollars to compete for advertising space.
Q: So what has Googles, Yahoo and to a lesser extent Microsoft over looked!
I believe its you and me! The mums and dads. Their greed for the big buck advertisers will kill the smaller enterprises. This intern will actually reduce customer choice:
Paul