Not everyone is sure that the deal between Yahoo and Microsoft will work out the way Yahoo and Microsoft hope but by in large, advertisers and search marketers are excited about the deal.
While Google will still hold a dominant lead in the search market, Microhoo becomes a strong number two, something that should create more competition. As David Kenny of Publicis' VivaKi told AdAge, "Anything that creates a credible platform and more innovation in search is going to be good for consumers and, therefore, good for advertisers".
The support for the Microhoo deal appears broad-based. Andrew Allemann, editor of Domain Name Wire, even wrote a letter of his own to the US Department of Justice, which will be reviewing the deal:
The deal is going to end up in your lap early next year, and a number of lobbyists will be screaming that the deal is anti-competitive. Don’t buy it.
This deal creates a competitor. It takes two also-rans in the search business and turns them into a true (although still relatively weak) competitor to Google.
As a small web site publisher, I’m convinced that having at least two viable advertising providers in the search space is critical to keep each one in check. Right now we have a growing ad provider in Google and a faltering one in Yahoo. Everyone else is a tackling dummy. By Yahoo and Microsoft joining forces, their scale will be enough to entice more advertisers to pay attention. This, in turn, will benefit web entrepreneurs.
The reaction to the Microhoo deal is in sharp contrast to the reaction to Google's failed deal with Yahoo. That faced resistance from advertisers groups and was eventually shot down when the US Department of Justice made it clear that it wasn't going to let the deal proceed without a fight.
This tells us a lot about where Google stands today. The search giant has been referred to in the past as a "frenemy" by one major agency exec and the reality is that Google is more like a frenemy to a lot of individuals and businesses. That sentiment is abundantly clear today.
The truth is that Google's days as a likable 'do no evil' upstart are over. It's a multi-billion dollar multi-national corporation. Package that any way you want; most multi-billion dollar multi-national corporations aren't going to win popularity contests.
Humans love to root for the underdog and Microhoo is definitely the underdog. So it's natural that individuals and businesses are supporting the formation of a stronger competitor. But Google shouldn't brush this off either; it would be wise to take the opportunity to engage in a little bit of introspection.
What can it do to innovate in search? How can it improve paid search for mutual benefit of both itself and its advertisers? How can it make its customers feel more satisfied about their role in the relationship? These are all questions that Google should be asking in an effort to address the fact that so many people are so eager for an alternative.
If we're lucky, Microhoo will create the type of competition we'd like to see in the search market. But Microhoo is not going to displace Google and if we're really lucky, Microhoo will serve as the encouragement for Google to be a better frenemy.
Photo credit: JVManna via Flickr.
Patricio Robles is a tech reporter at Econsultancy. Follow him on Twitter.
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Senior Product Manager at brightsolid online publishing
9:10AM on 31st July 2009
I like the way this deal conbines 'Yahoo!' and 'Bing' - perhaps we should be calling it 'Yang' rather than Microhoo - I'm sure MS are taking great pleasure in doing so.... ;-)
5:21PM on 31st July 2009
Nice to see Microsoft being hailed as an underdog. Indeed, the whole anti-"Micro$oft" thing that still abounds is a bit outdated (kinda like skiers who still hate snowboarders - so 90s). Yes the were pretty naughty when they were the undisputed kings of computing, but as the whole "Google as frenemy" thing demonstrates, any monopoly is going to get a bit freaky with the rules of fairness.
These days Microsoft is "just" one of several key players, and they are actually doing quite a lot of interesting stuff (obviously their browser strategy of pretty much ignoring the standards is still terrible).
However, to state that "Microhoo is not going to displace Google" is a bit too certain and does rather demonstrate the "it can never happen again" feeling that permeates business (c.f banker's bonus culture). Google has been the dude for less than a decade. Go back to those early days and folk in your position would probably have been saying "Google [great, interesting, good for competition] but it is not going to displace Yahoo"
I'm not saying that Microhoo (and I must admit to preferring Ian Tester's "Yang" portmanteau) is going to be the one that does the displacing (although given Microsoft's deep pockets and Yahoo's solid rump of support in the US, perhaps they stand a fighting chance), but as Andrew Grove said: "only the paranoid survive" and Google seem to have gotten very self-assured these days...
Maybe the "better frenemy" is still the most likely outcome, but all end of history predictions tend to end up being proven wrong.
11:29AM on 1st August 2009
Interesting article Patricia, the viewpoints expressed are based on the assumption that Yahoo! will be able to maintain eyeballs and market share. Looking at previous pertinent examples like AOL, I am not convinced that is the case.
Whilst advertisers may be convinced that it is in their interests in the short term at least there are a number of factors which I think provide concern about the deal.
The deal is good for Google and non-search start-ups -
The deal is bad for large enterprises and web 2.0 companies, particularly those who use cutting-edge open source software. It is also bad for the internet software eco-system -
The deal is bad for Yahoo! shareholders -