Cell Life

Google is very friendly with Yahoo these days. That is incredible, to say the least. These are cut-throat competitors in mobile advertising and search arena. Interestingly, the common enemy from Redmond is bringing these two firms together to drop the advertising competitiveness and try to work in complementary fashion. If it passes US anti-trust scrutiny, Yahoo is discussing a long term partnership with Google to source ads from Google and place them alongside Yahoo search results and emails. It seems Google ad leads to a much better pattern match and hence higher profitability than Yahoo model could achieve on its own.

If Google can sign a long term partnership with Yahoo, then Microsoft will be discouraged to make further bids. After all, Microsoft is interested in Yahoo with its intrinsic properties and search facilities (Yahoo’s internal search initiative is called Panama). A Microsoft bid for Yahoo which uses Google search technology in its search platform would not make any sense.

Both Google and Yahoo bottomline will benefit from the said partnership between the two, though, by going this route, Yahoo would essentially validate that Google is indeed the pre-dominant search technology platform. Yahoo will become more of an aggregator at that point in the search space rather than a search firm itself.

With a Google-Yahoo alliance, Microsoft will probably go after Facebook or other smaller social network portals to boost its internet offerings. There are rumors that Microsoft has discussed an acquisition with Facebook, the fast growing social network. Will Mark Zuckerberg at Facebook sell or should he sell to Microsoft ?

MT