MS To Acquire Yahoo: Two "Search" Losers Make a Winner?

Google is growing from strength to strength. A lucrative advertising industry is at stake. Yahoo’s Panama might have been an improvement over what Yahoo had before, but its in no way strong enough to pose a challenge to Google. Besides with the recent management exodus, the peanut butter memo-gate, the none to impressive quarterly results, and a shaky top management, Yahoo has hordes of challenges at hand.

As for Microsoft, their search and advertising strategy is simply way behind. It is struggling to get a foothold in this space and with each passing day, Google is expanding its presence and reach, thanks to its growing dominance of the search market. For an advertiser, the default choice is to advertise with the network that has the greatest audience. Moreover, once you start using Google Adwords and get familiar with it, you need something more compelling to change. It is almost like Microsoft’s hold over the desktop but certainly not there yet. But unless, the Yahoo-MS move fast, Google is going to be even harder to dislodge from a potentially huge advertising market.

So do two losers in the search and advertising market make a winner? Probably not. But at least it will pose a bigger challenge to Google, provided they can get over the integration issues that are likely to come with so much product/service overlap.

Check out stories on this news in the WSJ and the NY Times.

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