Yahoo-Google Deal Official; Now Can We Talk About Something Important?

from the well,-that's-that dept

Sorry corn farmers, it looks like Yahoo's potential deal with Microsoft has gone away, and Yahoo and Google have finally agreed to a plan that hands off a bunch of Yahoo's search ad inventory to Google, basically admitting that Google is just better at serving the long tail of the advertiser market.

Basically, this means that the search ad market battle is settled, Google has won. Yahoo's mistake all along was trying to play catch up and to build its own Google, rather than focusing on doing something different. Hopefully, Yahoo can now reinvent itself to focus on providing something that's not just a Google competitor, but which actually provides a different value proposition to users. Of course, at the rate Yahoo seems to be bleeding talent these days, that might not be so easy. Plus, of course, the feds are almost certainly going to take up the cry of those corn farmers, and investigate whether or not the deal violates any sort of antitrust rules. That's going to be a major distraction as well. So, rather than focusing on Yahoo's struggles, perhaps it's time to go focus on the next interesting startup. After all, that seems to be what a bunch of Yahoo's employees are doing.
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Filed Under: advertising, antitrust, search advertising
Companies: google, microsoft, yahoo


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  • identicon
    Anonymous Coward, 12 Jun 2008 @ 7:15pm

    The problem with Ichan is that he sees Yahoo as a product that he can buy for $0.25 and sell for $0.75.

    What's facinating, is that Yahoo in a lot of ways, operates as a "Services Company" wherein their end product to customers is really quite intangible. Service companies are a very different animal because they attempt to add value in some way to a customer's life. Consider what percentage of the well to-do and have American Express. Their model is based around providing excellent customer service. If AMEX was to start nickle-and-diming their customers, like others do, they would loose their prime customerbase who. I also enjoy it when they dispatch a courier to fetch a bag of M&Ms. (It's one of my guilty pleasures too.)

    Now should a large culture change, a change of the BoD perhaps, occur at Yahoo, it's quite possible that within a few years, Yahoo's focus may not be focused on advertising revenue. The business model would slowly change, no longer customer-centric, I imagine Yahoo's userbase would seek alternatives and diminish within 3 years. Remember Excite.com?

    It will be interesting to see if Ichann continues to influence this or cash in his chips.

    reply to this | link to this | view in chronology ]

  • identicon
    Dohn Joe, 13 Jun 2008 @ 8:08am

    Reinvent Themselves?

    It would appear to me that YAHOO had "reinvented" themselves 3 years ago when they started their YAHOO Electronics (Y!) division. They had a YAHOO DVD player which sold for ~$60 at Wal-Mart and was perpetually sold-out (no surprise as it RELIABLY played DivX and had SD-Card and USB ports to play off mass-storage devices).

    I've tried purchasing one but it appears YAHOO decided that success isn't their thing and have eliminated their electronics division.

    reply to this | link to this | view in chronology ]

  • identicon
    Micha, 13 Jun 2008 @ 8:39am

    Corn Farmers

    You are not a corn farmer... thank god. You're just ignorant.

    reply to this | link to this | view in chronology ]


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