Microsoft Wants to Yodel "Yahoooooo-oooh!
Microsoft and Yahoo revealed this week a hint of the desperation that both companies face as they confront a rapidly growing Google monster. Neither Yahoo nor Microsoft has had much success in standing up to Google’s advertising machine. Yahoo and Microsoft both offer technologically speaking products that are probably severe year to Google’s advertising solutions.
Google however has the advantage in the form of a large supply of advertisers to enable Google to provide truly contextual advertising at every turn of the Web. Google also has a very solid lock on the search engine industry. The combination of advertising and search have proven to be the holy grail of the Web for the last 10 years.
As Google starts to step into Microsoft’s software world providing word processing and spreadsheet products along with Gmail, Microsoft is confronted with an offensive frontal attack. Meanwhile Yahoo has been unable to recapture any of its former glory. The weakness at Yahoo combined with Microsoft’s natural tendency to purchase and merge with technology companies have created a situation where a merger would be beneficial and is rapidly becoming necessary.
Regardless it doesn’t look like any of the principles in the negotiation will be breaking out their bic pens to sign on the dotted line anytime very soon, however it would not surprise me if the deal were cooked up by the end of summer. Neither Microsoft nor Yahoo can afford to allow another year to go by with Google maintaining a stranglehold over online advertising.
