Yesterday Yahoo CEO Semel gave a timeline for when his company would drop Google for Yahoo’s own internal search technology: this quarter. This has a limited effect on Google’s revenues – Yahoo paid Google less than $10 million a year to license its organic search listings, and has never used Google’s AdWords, where the real money is. But the effect could be argued to be more psychological, and oddly, good for Google.
Google is widely understood to be the 800-pound gorilla of search, and whispers of “monopolist” have begun popping up from time to time (not particularly well-thought-out whispers, but real nonetheless). Certainly whenever journalists cover search, they quote the “Google owns 80 percent of the search market” meme. With Yahoo’s distribution gone, Google may well benefit from the sense that there is more balance in the market. Once it is perceived to be battling much larger companies like MSFT and Yahoo, companies that have as large if not a larger share of the organic search market, Google may again become the internet’s underdog, a position I sense it might very well prefer.
Google is not necessarily the gorilla, and this is not necessarily good for Google. Yahoo has a significant war chest, and a varied revenue stream. Advertisers with Yahoo stores need not apply to advertise on the AOL network; you are turned away. If the resurrected Playboy vs Netscape (by the Ninth Circuit – see http://news.com.com/2100-1024-5142058.html) results in precedent favorable to the mark holder, in this case Playboy, Google will have a larger liability exposure to any fall-out. The ‘we are (just) an ISP’ defense doesn’t really cut it.
And why should Google benefit by being the underdog? Are you going to lead the market or not? Google’s technological stance is quite singular among the search engines, they are after all the one with the ‘algorithm’ and can easily be considered the mother of heuristic search. The thin veneer of a democratic algorithm is largely worn away by the actual site-building community. If Google is a technology company, they should fight their way to a leadership position and Lead