… Google. OK, we aren’t the first to say this. In fact, Google’s Matt Cutts ran a poll to ask who won: A. Yahoo or B. Google. Lots of folks answered “Google.” That’s because, for the short term at least, it’s hard to see how anybody can come out of this any better than Google.
And we’re quite a ways from knowing who will win in the long run.
But before we go there, let’s take a quick look back to see how we got where we are today:
- Yahoo (Yet Another Hierarchical Officious Oracle) incorporates in 1995. Google comes along in 1997, MSN Search in 1998.
- Yahoo inadvertently fuels Google’s growth by allowing Google to power Yahoo search in the early 2000s.
- While Google grows its powerful engine from its own core technology, Yahoo and MSN use blended results, growing by buying competitors, trying and re-trying their own engines … and continuing to lose ground to Google.
- By 2006, Google surpasses Yahoo in search marketshare. MSN has about half the share of the Big 2.
- From 2005-2008, Microsoft and Yahoo flirt with on-again, off-again merger talks. The most serious comes in the form of an unsolicited $44.6 billion offer by Microsoft in 2008.
- In mid-2008, Google and Yahoo try to get back together, announcing a deal to run Google’s contextual ads on Yahoo properties.
- But by the end of 2008 Google, fearing Justice Department intervention, calls off the deal with Yahoo.
- Meanwhile, Google’s marketshare reaches at least 65% in 2009, with Yahoo and Bing (Microsoft’s latest engine) around 30% combined. (Out here in the wild, we often see Google driving 75% of traffic to strong, well-written sites.)
- Finally, CEO’s Carol Bartz of Yahoo and Steve Ballmer of Microsoft announce a 10-year deal between the companies that leverages Yahoo’s high traffic volume with Microsoft’s technology for search and self-serve ads.
Here’s Yahoo’s Bartz on the deal:
And Microsoft’s Ballmer:
So why do we think this deal benefits Google? Doesn’t the combined power of Yahoo and Microsoft make a more formidable opponent? In theory, yes. But in reality, any synergies from the deal are two years away – if they ever happen.
First, the deal must pass government review, a process that President Obama has promised to make tougher than previous administrations. And if the deal is allowed – which it likely will, but with Google slowing the process where it can along the way – the parties say it will take 24 months to fully integrate their efforts. What marketshare will Google have by that time … 85%, 90%? The chasm between No. 1 and No. 2 could very well be greater than it is now.
Don’t get us wrong … we like the MicroHoo, er, YaSoft marriage. Competition is good. Since the launch of Bing, for example, we think we’ve seen more chatter than usual out of Google. That leads to more innovation, and better online experiences for all of us. We just think by the time that happens, the game will already be over (if it isn’t already).
Note: Here are some resources used for this entry.