Relationship on the Rocks: Google, Yahoo, Microsoft Deals

Friday, June 20, 2008

Why can’t they all just get along? For our sake?


Google announced last week that Yahoo will be granted access to Google AdSense, changing (and improving) search and content advertising for Yahoo users. Not everyone is pleased with this proposed arrangement.


Carl Icahn, 46th richest man in the world, currently owns 4% of Yahoo and is attempting to replace the board. This is of course being done to reopen the merger talks with Microsoft. The Yahoo-Google deal stipulates that the whole arrangement can be thrown out if the current Yahoo board is replaced.


While this deal looks great for advertisers, every day online customers and publishers, it will significantly limit the growth potential of Icahn’s portfolio. When speculation began to surround the Microsoft/Yahoo deal, shares consistently increased in value—however, when the deal was quashed, that value dropped and shareholders are understandably upset. CEO Jerry Yang is not a popular guy at Yahoo right now.


What do these deals mean for us? The current search landscape appears to be ready for a change by either Microsoft, Yahoo or both in an attempt to reign in the Big G. Search will be business as usual, with Google slowly gaining more of a market domination until second and third place decide on their next move. Whether these moves involve banding together or joining the leader remain to be seen.


It looks like the overall quality of search advertising will improve with the Google-Yahoo deal, but choice for end users will diminish.


For more information about Thursday’s Yahoo-Google agreement, read the Official Google Blog.

Posted by Chris Breikss on 06/20 at 11:22 AM
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