Over the last few years Google has been kicking sand in Microsoft's face and now the two titans are fighting it out in a billion dollar sand pit. I would imagine that Steve Balmer at Microsoft must be fully expressing his feelings at the Microsoft offices in Seattle.
In spite of the huge corporate tussle what's really important is what this means for domain name owners and is Yahoo now a potential Google acquisition? I wouldn't count Microsoft out just yet. There is a looming 26th April deadline that Microsoft has to respond by in order to progress with the Yahoo purchase that I'm sure will spurr the Redmond company's acquisition team into motion.
What was unexpected was the partner that Yahoo selected in which to defend itself. There are a few options open to Microsoft, one of which includes a proxy fight that may end up with the Yahoo board being removed.
So are the beginnings of the Yahoo/Google partnership real or just created due to a corporate war? I personally don't believe that the anti-monopoly authorities will allow Google to affectively control 80% of the search market with an acquisition of Yahoo. Therefore the conclusion must be that it's merely a spoiler move that will potentially delay the Microsoft acquisition of Yahoo for some time.
An interesting bystander in all of this is Rupert Murdoch's News Corp which owns 100% of Facebook and may end up becoming a strong ally of Microsoft. This would mean that three of the biggest websites on the Internet would be brought together; Facebook, MSN and Yahoo. There's one thing that I know about Rupert and that is he'll ensure that he's dealt into a deal of this magnitude, so watch what happens to the News Corp share price as this plays out. At the moment the shares have been completely hammered by the global down turn so it may now be a bargain.
So what would it mean for domainers if we suddenly had a Goohoo? For a start nothing of this scale happens suddenly. If it did happen then there would be a dramatically reduced level of competition in the online advertising marketplace and this would definitely not be of a benefit for domain owners.
At the moment if Google doesn't pay a good rate for traffic you can always go to Yahoo but if there was only Goohoo then what are you going to do? The only potential option would be to hope that Microsoft manages to scale its PPC advertising levels up. Once again, this is not a short term fix that will be quickly up and running.
Our only real hope against declining PPC prices is if the federal regulator steps in a denies any sort of acquisition aspirations that Google may have for Yahoo. Stranger things have happened...
Source: Posted on WhizzBangsBlog by Michael Gilmour -- Reprinted with permission -- April 11, 2008
Michael Gilmour