May 4th, 2007

Microsoft And Yahoo Combined Can’t Beat Google

by Scott Karp

  •  Comments

Perhaps there are good reasons why Microsoft should acquire Yahoo, but beating Google probably isn’t one of them. The reason is simple:

Microsoft and Yahoo have businesses that leverage the online network.

Google increasingly IS the network.

AdSense is the largest content network in the world, and Google’s search market share continues to accelerate (from Hitwise):

hitwise-search-marke-share.jpg

Yahoo and Microsoft/MSN are fundamentally Web 1.0 portals, and email is still the universal portal feature. But in an advertising-driven online business model world, email has little value itself — it’s all about driving traffic to more valuable content sections of the portal. But search, as Google has demonstrated, is an advertising goldmine — although Google AdWords is still a fare more efficient moneymaker than Yahoo’s Panama and Microsoft’s AdCenter.

Search is catching up to email as the top daily online activity (via Pew Internet & American Life Project):

pew-internet-american-life-daily-trends.jpg

DoubleClick extends Google’s control of the network — the DoubleClick’s Motif platform, like AdSense/AdWords, is a distributed platform for optimizing online rich media advertising…where everything passes through Google.

Everything passes through Google. How can Microsoft/Yahoo compete with that?

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Topics: Google | Microsoft | Search | Yahoo

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  • Microsoft has a market cap over @290 billion; Yahoo! has a market cap over $42 billion. The search traffic of both combined will be larger than Google’s. They also will be much more diversified, something Google is trying to buy with their purchases of ad agencies etc.

    Microsoft controls the more of the operating system, Internet browser, servers, user software: I think Microsoft is much more the network than Google.

    Combined they beat Google all day long.
  • Gerry,

    "Microsoft has a market cap over @290 billion; Yahoo! has a market cap over $42 billion."

    Market cap is irrelevant

    "The search traffic of both combined will be larger than Google’s."

    Not according to the Hitwise data above? Where do you get that from?
  • Q. Everything passes through Google. How can Microsoft/Yahoo compete with that?

    A. Private networks
  • Google isn't the network...

    I am.

    And you are.

    The weakness Google might have is that they might actually BELIEVE that they are the network. Reminds me of another company who made the same type of mistake....What was their name again...Micro something or other....??!
  • I do use one Google service, Google Analytics (and when I have the money to get a new(er) iMac I'll be using it even more). But my preferred search engine is Gigablast. Give it a short and you'll see why. Now, if Google added a certain Gigablast function, I'd probably go back to searching with Google.

    Google won the search engine wars because they did searches better than most anyone else at the time. Even when other search engines caught up Google retained the advantage because people prefer what they know. Gigablast helps you tighten your search. Kazoo (the last I looked) provided a flash based user interface that helped with identifying which sites were more relevant. But it's rather doubtful either could ever catch up with Google, assuming they even wanted to.

    Somebody will come along and knock Google off the pedestal. But that'll happen when a new Internet technology that changes how we use the Internet, and that means a new computer technology.
  • Ooops. That's Kartoo. It's owned by a French company.
  • Jeanette
    There's a similar article here, but it discusses the technical details.

    But no, MS and Yahoo can beat Google together. No doubt about that.
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