Microsoft + Yahoo 1 + 1 = What?

By: Jim Warholic

OK folks, with the proposed buyout of Yahoo! by Microsoft, everyone is trying to dissect what would be the consequences of such a buyout.

Well, I'm no expert, but many experts have many different opinions about how this would affect the search and online advertising landscape, so I'm going to add my two cents worth of opinion.

In my opinion I don't think it will change the landscape that much for Google. In the short and long run, this might actually be good for Google and its users because they will have stayed the course.

There are so many things between Yahoo! and Microsoft that are redundant that I can't imagine there not being major layoffs, hence the term "cost savings." Microsoft can pick and choose which items they want to keep and which ones they would put on the back burner so-to-speak. The absorption of technology by Microsoft from the Yahoo! acquisition would take time to decide which technology is ultimately going to be used for online advertising delivery and other technology services. Even if they were to integrate two different advertising platforms, it still comes down to a major degree of difficulty combining the two.

Then there is the whole cultural challenges facing Microsoft. Yahoo! employees have looked at Microsoft as the other team. Microsoft arrived on the search scene and the online advertising scene late. They have invested billions of dollars on trying to catch up to Google, and have not made much of a dent. But, the online world is quite different than the typical challenges with increasing market share. The buyout does not represent anything new for Microsoft. So where is there really going to be an increase in market share. As long as Google delivers great values for their users, it is highly unlikely that Google users would jump ship and move over to a combined Microsoft Yahoo! company.

Then, think about the brand. Will it be Microhoo or Yahoosoft? Seriously folks, how will the brands be integrated? Will it be MSN Search, Live Search, Yahoo! Search, or what? Will Microsoft keep all the brands, and will that ultimately help their market share? Interesting and fascinating all rolled into one. Sounds like a great topic of discussion for a college course.

If Microsoft wants to do it, let them do it.

Just like in sports, where there is free agency, and teams think there is value in one player over another, and are willing to pay whatever top dollar they think is appropriate, another team can come in and say they are willing to pay more for that player. Well, this Microsoft Yahoo! deal is much the same. Google has offered some things that could ultimately be better for Yahoo!, such as providing the search engine for Yahoo!. Interesting times we live in. I guess the shareholders will ultimately decide.

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