free html hit counter The Other Shoe Drops On Yahoo - John Battelle's Search Blog

The Other Shoe Drops On Yahoo

By - February 01, 2008

It’s become an old saw – Microsoft will bid for Yahoo, because neither company can figure out how to crack the Google code. Now that it’s happened, will it … happen?

(PS, did you catch the reference to the project here?)

My previous coverage of this includes a prediction it’d happen in 2007 (nice timing), and a modest proposal the two companies join their search efforts. Here’s my interview with Steve Ballmer at Web 2 last year, where this topic certainly comes up.

I’m still not sure this works. I don’t see how the two cultures merge. But perhaps that’s not the point. Perhaps at the end of the day, Yahoo becomes Microsoft’s long half-hearted media arm, and the folks in Redmond can finally stop worrying about what their focus is. As I wrote back in May 07, perhaps it’s time for Microsoft to be more like GE.

More later…

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13 thoughts on “The Other Shoe Drops On Yahoo

  1. stone says:

    I don’t think this is really about Search. Both companies are losing share to Google. Both are having trouble inspiring users. Both have tried unsuccessfully to launch features that users want.

    This is really about display advertising and traffic. aQuantive, Right Media & Blue Lithium can now compete against Google’s soon-to-be-launched DoubleClick Exchange. With traffic at and, Microsoft has just guaranteed “scale” for years to come, meaning that all advertisers that work with Google will also have to work with Microsoft, which buys them more time to build products that users actually like.

  2. nmw says:

    Last night on the earnings call Sergey said that Google basically hasn’t even gotten to square 1 with social search. Seems to me that Microsoft and Yahoo (with brands like Flickr and Digg and Facebook, etc.) are far ahead. But neither Google nor Microsoft/Yahoo have the keyword properties similar to those that IAC and/or CNet (and/or others) have — except: Live.

    Search share is a bogus concept — I have yet to see a search market share analysis that tracks how often home buyers have searched for (and bought) homes using , or — and I don’t think such statistics will ever be available, either (I guess the closest thing we have are alexa rankings, but they are apparently quite unreliable).

  3. Ciaran says:

    @nmw – “search share is a bogus concept”; really? Google has a huge share of the UK search market and this mean that they nearly top the largest TV channel in ad revenues.

    And yes, Alexa data is more or less meaningless!

    @John – “But perhaps that’s not the point. Perhaps at the end of the day, Yahoo becomes Microsoft’s long misbegotten media arm, and the folks in Redmond can finally stop worrying about what their focus is.”
    Makes sense to me…

  4. nmw says:


    Do you count to be part of the “UK Search Market”? What share do they have? What about other .uk sites? Would you say that is a search engine? Why or why not? Do you feel that it is limited to the “UK search market” or would you say that it’s truly a global search engine? If so, what about Which other search engines have you tracked?

    Thanks for you help — I am really eager to learn more!


  5. Charlie says:

    The trouble with Microsoft is their upper management, I’m guessing. They think only of the dollar, and are not inspired by ideas, or by the prospect of giving something away to make the internet a better place.

    Granted, they do give money away to make the world a better place, and props to them for that, but their business attitude is always “embrace, extend, destroy” or some variant. It has never resonated with geeks, who inherently dislike anything that gets in the way of cool, simple technical innovations that make things run smoother.

    Look at all the software Google has put resources into, turned students loose on for summer pay, and given away on generous terms. Look at facebook and the Thrift project they released to the community. Microsoft could do so much of this if they wanted, but they don’t.

    Instead, they have built up so much ill will toward the Microsoft brand from geeks that I don’t know what it would take to turn that around. I practically feel it is my duty to steer friends and family away from their stuff.

  6. Mystic Liquid says:

    I think is a good thing and Yahoo should go for it.

  7. saran says:

    Microsoft, Instead of buying yahoo, you should build better search engine. How much it is going cost? may be $10B? or $20B?. Even if you purchase,
    – still a better search engine is missing
    – you have to face lot of legal issues, especially in UK.
    – Yahoo doesn’t worth for $45B.
    – Anti-trust authorities going to block the merger
    finally Google probably buy Apple or someway they merge together to fight with you.

  8. Shakir Razak says:


    Here’s a thought: what if, in addition to all the geek/platform stuff, the calculations include core propriatary editorial content that no one except Murdoch and Time-Warner can really match, but if Google retains its organic results methodology, then microsoft gets that in addition to the relationships and access that come from all the agreemenmts and platforms from mobile to cable -maybe not bet against MS going for Tivo and Macrovision as well, eventually.

    Yours kindly,

    Shakir Razak

  9. ariel seidman says:

    Seems to me like they already operate the business like a GE…

  10. nmw says:

    @Shakir – it’s nice to see how you are using your brain (I totally agree! πŸ˜‰

    Indeed, yesterday I also asked much the same at:

    And NYTimes is reporting much along these lines, too.

    Of course if any of these companies were a little smarter about their approach, they would use their technology (BTW: just like hardware, I feel that software / applications are quickly becoming a “commodity” [see ;]) and apply it to a couple thousand keyword domains (@ $10K per domain name, they could buy 100,000 domains for just $1 billion — that’s more/less the entire English language ;)…

    Now that domain tasting is going to end, I think it ought to be time for these people to wake up and smell the coffee.

    Speaking of coffee, maybe Mr. Battelle could get somebody to advertise for something better than:

    FFind PPeople

    SSearch FFree, LLost FFriends, FFamily FFind PPeople FFast


    (brought to you by: Ads By Google πŸ˜‰

  11. nmw says:

    Hmmm — I followed the above .INFO and it told me that “ is the online leader…” (so apparently findoldfriendssite is something like an “online follower”?).

    I thought Google was said to have solved the arbitrage issues?!?

    Then again, if you managed “”, would you want that link actually showing up with the questionable advertising that Google puts on websites? Stuff like ?!?!?

    Gimme a break, man — this is not the “community” that I would want to “flock with”… — LOL !!!

    ;D nmw

  12. Adam Sharp says:

    Not gonna work. Microsoft’s management of web properties has been dismal. They lost $839 million last year, despite the huge advantage they have thanks to being IE’s default homepage. Plus the culture clash you mentioned and other issues.

    Brian Caulfield of Forbes said it best, “Call it reverse synergy – both Microsoft and Yahoo! are weak where Google is strong, in search and search advertising.”

    I think it’ll prove to be a net positive for Google, thought about it a lot yesterday:

    It’s still seems a decent gamble for MSFT, but a big one for sure. Seems unlikely they’ll succeed, but if somehow they do, the rewards will be huge.

  13. nmw says:

    @Sharp I disagree — Microsoft has been investing in social / community search for some time now (e.g., — and this is a very good fit with Yahoo’s community-oriented approach ( ,

    Not all people believe that SEO’ed sites are necessarily the best sources of information — and those who prefer the “wisdom of the crowds” approach may fare much better using MS/Yahoo’s approach.

    Ultimately, it is not just the size of a community that matters, but also the type (and level) of expertise of its membership. For example: it could be expected that might be managed by a community of realtors with a commercial focus (and if that type of expertise were desired, then this would probably be a good place to begin searching for such information).

    Likewise, I understand that many FM bloggers with expertise on topics related to pregnancy and/or “baby” issues are now working together with Johnson&Johnson (addressing topics that might be important for that readership).