Friday, May 16, 2008

The End Game

With Microsoft having withdrawn its bid for Yahoo, Carl Ichan was quick to step in and try to place his own controlling board in charge of Yahoo at the next annual shareholders meeting.

Well, I am one to think that no matter what happens, most of the folks have not thought of the end game scenario. Microsoft certainly didn't think of the end game when Yahoo rebuffed Steve Ballmer's attempt to acquire Yahoo. After saying essentially that nothing was going to stop Microsoft from acquiring Yahoo, that is in effect what happened (at least for the time being).

With the dog's on it's tail, Yahoo, with the help of Google, a long time acquaintance and friend are ready to work out a new advertising arrangement.

To understand the history of Google and Yahoo's association we need to go back in time, to the early years of Google.

Google Corporate History

1998 Among those they called on was friend and Yahoo! founder David Filo. Filo agreed that their technology was solid, but encouraged Larry and Sergey to grow the service themselves by starting a search engine company. "When it's fully developed and scalable," he told them, "let's talk again." Others were less interested in Google, as it was now known. One portal CEO told them, "As long as we're 80 percent as good as our competitors, that's good enough. Our users don't really care about search."

2000 On June 26, Google and Yahoo! announced a partnership that solidified the company's reputation — not just as a provider of great technology, but as a substantial business answering 18 million user queries every day.

As a side note, I wonder who the quote is from above, "As long as we're 80 percent as good as our competitors, that's good enough. Our users don't really care about search." I guess we will just have to guess who the identity is for now. Read marketing strategies for your business.

So, as we can see, Google and Yahoo were close partners to begin with. Now, it is quite possible that Yahoo is coming back to the fold.

If you think about it, Steve Ballmer may have done both Google and Yahoo a favor by forcing the talks to happen between the two. From Microsoft's point of view, this could have been a big mistake ever coming to the Yahoo table in the first place and then walking away. If you are going to play out a multi-billion dollar gambit, and placing the majority of your spare billions of dollars into a deal, you better have the end game figured out. Is it possible that as the saying goes, pride comes before the fall? ??

Time will tell.

By-the-way, no sooner did I get this posted, I read online that now Microsoft is trying for a piece of the partial action for Yahoo in the form of an advertising revenue sharing arrangement, agreement, purchase, or who knows what. Wow, what a wild wild web we weave!

By Jim

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