Picked up by Praized, and noted by Scoble - the growing “Fear of Google” (FOG) is causing much consternation in the advertising industry. The market share dominance of Google strikes fear into the hearts of the “rest of the channel”. And while Google executes, Yahoo is stumbling and Microsoft just seems to reinforce that embarrassing Apple commercial persona. So, the unthinkable is happening - onlookers are cheering the notion of Microsoft acquiring Yahoo. What to think?
There is a pretty fair argument that the “old media set” would benefit from a more even playing field. The ability to carve value as a intermediary increases when ad distribution is not concentrated. All fair, but I personally prefer to focus on the more interesting battle ground for local - around the emerging social and vertical dimensions. Finding pathways for conversations to occur on the third page and outside of the search box redraws the battle lines and “lifts the fog”.
Regarding the rumor, the track record of market advancement after mergers of this complexity and magnitude is pretty poor. I can imagine the sheer delight in the Googleplex over a Microhoo (Yahsoft?) announcement. The last thing either one needs is to lose months and months over political infighting, resume polishing and housing market consternations, followed by a few quarters of “platform evolution”. Those cheering the merger might want to pause and think about execution risk.
IMHO, Yahoo needs to just get on with making a really serious and meaningful bet on their social search vision. It needs to execute deliberately and obsessively and really apply those great assets. Microsoft? How it has made itself so darn meaningless is just mind boggling.
There may be more interesting scenarios on the whiteboards these days. I am intrigued with a deep alliance/venture between at&t and Yahoo. Yahoo has managed to show some serious life in mobile. at&t has a killer mobile asset base and in yellow pages and 411 - these can combine to pose a really serious threat to Google’s intentions. mobile + social feels like a much more formidable combination from which to battle and differentiate. On the MS-YHOO front, the notion of breaking up Microsoft, and reforming a more powerful online media company w/Yahoo with deep distribution relationship to the mothership also may have merit.
As much fun as it is to muse, it’s a heck of a lot more useful to put that stuff aside. Let’s get on with building the value in the new dimensions of local - deepening the vertical reach, and extended real shopping value and conversations between buyers and sellers. Close to the ground, where the rubber meets the local road, the fog is barely visible.
I certainly agree with your point about the distraction and wasted ergs in mergers of this magnitude. I have seen the so-called synergies evaporate in the inevitable political gamesmanship. Time Warner/AOL: a once a perfect marriage of content, aggregation power, and distribution channels; in reality a fiasco of hubris and leadership incompetence. The most overlooked success factor in any merger is culture. If you fail to manage that, you gain nothing. Companies that have competed against each other have learned to despise each other (yes, sometimes there is respect as well) and bringing them into a single organization only serves to make their mutual dislike go covert.
Left by Pat on May 8th, 2007