Google eyes up Yahoo and eyes down Microsoft

yahhh.jpgReuters reports that Google is now considering its’ position on acquiring Yahoo in light of Microsoft’s recent bid proposal, whilst “a second source close to Yahoo said it had received a procession of preliminary contacts by media, technology, telephone and financial companies.” (quotes Reuters).

Microsoft and Google are the true contenders here in my opinion; The other companies would be making strategy moves which would be of benefit to themselves in the sense they would rape and pillage Yahoo assets, leaving an empty husk that was once a revolutionary company (Netscape anyone?).

Google’s argument revolves around MS’s dominance in the browser and OS. Equally Google forgets that Yahoo being #2 to Google’s #1 in the Search service means that Microsoft gains there, whereas Google would get nothing new – of course they would absorb other services like Flickr and maybe integrate with YouTube (somehow), but I personally feel that MS would make best use of what they aquired.

That being said, we have to consider what happens to the brand; It’s a powerful brand right now – albeit not nearly as powerful as G or MS – if MS take over Yahoo they’re sure to wind down the branding, consolidate the IM services and tie everyone back to having a WindowsLive! ID – that’s not such a great thing.

IF Microsoft could somehow retain the independent feel to Yahoo whilst rolling up services back into the main corporate stream I think that would work pretty well in terms of consumer positioning – much like Google/YouTube. They (MS) also need to consider their strategy for webservices and web APIs – Google is rapidly pushing out new ones which are way ahead of anything I’ve seen out of Microsoft – this is where the power of Web 3.0 will come into play – more SOA with Web APIs, extended mashups and seemless intelligent services combined from many sources.

Google has started to make rumblings about this proposal (understandably); Ars Technica is covering this in an article – quote “It isn’t an understatement to say that Google apparently opposes this deal. Going for the jugular, Google’s Drummond instantly suggests that the Redmond giant could (would?) use unsavory tactics for unfair advantage, ultimately harming the Internet and the very open and innovative environment that’s driving it.”  This is the one concern I do share – that Microsoft will MS’ify all the services and close off systems so that you’re locked in to MS proprietary systems and components.

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