free html hit counter PS: Remember my Modest Proposal? - John Battelle's Search Blog

PS: Remember my Modest Proposal?

By - May 02, 2008


One of my musings from more than a year ago makes more sense to me now, given that Yahoo is trying to fend off Microsoft with search monetization from Google:

One of the longer bomb predictions made by a number of analysts and pundits in the past 12 months has been the following: Microsoft will take its pile of cash and massive market valuation and buy Yahoo. Hell, I even suggested it. The logic goes something like this: Combine the two companies’ reach and search share, their CPM advertising businesses and various other plays, and you have a behemoth that can take on Google.

Fine, except I don’t buy it anymore, mainly because I think both companies are not well positioned to deal with a successful merger. And, I think there might be a better way. Now, those of you who read regularly may recall my LiveSoft post a year ago, in which I suggested that Microsoft set its Internet businesses free. Well, thanks to many folks who work in the industry (and one in particular who will remain anonymous for now), my thinking has evolved. I no longer think Microsoft should spin out LiveSoft, nor do I think it should buy Yahoo. Instead, it should roll out a new company that focuses on one thing: Search monetization. But it shouldn’t do it alone. Instead, it should be a joint venture with Yahoo.

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3 thoughts on “PS: Remember my Modest Proposal?

  1. stuka says:

    Ok, not to be rude or anything, but the very fact that your thinking has evolved significantly in the past year is proof that your current thought may not hold the test of time. Would you agree? Let’s acknowledge the one basic fact – no one has any idea how things will shape up. One strategy is as viable as another – only obvious thing is that Search is too big to be ceded to one company in perpetuity. The second fact is that you need scale to build Search – a fact that seems to escape most people who assume that new technology alone (brought by some new cool start up) will somehow prevent Google from becoming a monopoly in perpetuity. It does not matter how good the concept is, you need scale of queries to test and build and finally monetize. So, MSFT + Yahoo is just the most obvious and probably the “easiest” way to build that scale. Otherwise, you take the earlier IAC route of picki9ng up disparate properties and hope to somehow tie them together. Did not work for IAC but it could work in the future.

  2. nmw says:

    That’s an interesting point, Stuka… — John, could you perhaps try to explain to my feeble mind how a conversation could “scale“? Is it possible for anyone to have a conversation with a billion people? Really?!? Like about what? I mean: Even a weather forecast is localized….

  3. konteyner says:

    john nice word. certainly to be added you.