Microsoft, Yahoo! & Google
What exactly has Microsoft got to gain from purchasing Yahoo! The only thing I can see is econoimies of scale from combining the activities they carry out in parallel at the moment. Games, News, Chat etc etc. But this is not the problem for either Yahoo! or Microsoft. They do chat, games, news etc etc very well.
The problem they have is sub standard search technology. A meger between Yahoo! and Microsoft is not going to solve their problem. This merger makes very little sense. Sure they will be more efficient but the problem is they don’t generate anywhere near the revenues they want.
The worry for Yahoo! is that they don’t have a plan. Well, at least that I can see. Has anyone from Yahoo! identified their problems and how their going to solve them? I mean with a Microsoft bidding for them, now is surely the time to tell people what their future plans are and show how a Microsft takeover is such a bad idea. But I haven’t heard anything.
If anything the ideal partnership would be for Google to take a controlling stake in Yahoo! and let the companies run seperately. This would be a utopian situation for Google. Their problem is that people only spend a fraction of a time on their site compared with visitors to Yahoo! Google’s problem is they dont want to comprimise the users search experience. Run the two as is and show Google adwords on Yahoo!. Lets be honest here. Google adwords is decades ahead of Yahoo! in paid advertising both in terms of philosophy and execution. This would be a real cost saver for Yahoo! as they would no longer have to spend money on maintaing and developing their paid advetising programme.
