My first reaction to the news that Microsoft wants to absorb Yahoo! was “of course.” After all, Microsoft has not managed to stop Google from becoming the only technology player that matters. Microsoft has not stopped Google from becoming the only player whose strategy is the center of the universe. Microsoft held the coveted position as the company around which everyone planned his strategy for two decades. Now it’s Google. Venture capitalists, investors, content providers, advertisers, businesses, and technology firms plot their courses around Google’s trajectory. This must really annoy Microsoft! More pragmatically, Microsoft needs a competitive search marketing/advertising offering. There’s a lot of money at stake. There’s brand at stake. There’s mindshare at stake. Search has become the starting point for all network interactions. Microsoft can’t afford to cede that first point of user-contact to Google. It’s worse than losing the browser wars. People search from their mobile phones, from their PDAs, from their cars, from their phones, from their TVs.
My second reaction to the Microsoft/Yahoo! take-over bid was, “oh no!” This is not good for customers. Having fewer choices never is. Having Microsoft—an already untrusted behemoth as our alternative to Google—(can we trust Google not to spy on our every move?) gives us two “big brothers” from which to choose and fewer alternatives. I immediately began thinking about white knights. Barry Diller, Rupert Murdock, John Malone all came to mind—so did eBay, Amazon, and Apple. I was intrigued that Google stepped up to the plate and offered a helping hand to stave off Microsoft. “Come partner with us, the way that AOL has done, and we’ll help you keep the green giant at bay.”