Is Google Really Threatened By This Yahoo Microsoft Deal?

    August 4, 2009
    Chris Crum

Are you tired of reading about the Microsoft Yahoo deal yet? Obviously not or you wouldn’t be reading this. There has been a whole lot of coverage to digest, and there will certainly be a whole lot more as the deal gets scrutinized and continues its journey to fruition.

Steve BallmerThere has been a lot of talk about the deal being bad for Yahoo and good for Microsoft. This may or may not be true, as it’s really way too early to tell for sure, but Microsoft CEO Steve Ballmer has been doing his best to try to convince people (mainly Yahoo shareholders) that Yahoo is in fact getting a good deal.

Yahoo’s shareholders of course didn’t see it that way, and Yahoo’s stock plummeted after the announcement of the deal. But that’s because "nobody gets it," according to Ballmer. Shareholders wanted cash, but Ballmer says they should be happy with the elimination of Yahoo’s search costs and the added advertisers that will surely come from the deal.

Others in the industry feel that Yahoo is simply making a big mistake by eliminating its own search business. Although there’s no denying that Bing has been building some buzz, and those pricey TV ads are helping to fuel that, but how many of the average Yahoo users will even care?

The ultimate question of this whole thing is will this really give Google significant competition in the search space? Again, it’s too early to truly tell, but my gut is telling me it’s not going to make an incredible difference.

If a typical Google user has tried Bing and decided to continue using Google as their primary search engine of choice, they’re not going to abandon it because Yahoo’s using it. Does it matter that much to Google if Yahoo users are using Bing? They were already using Yahoo over Google, so what’s the difference? 

Microsoft and Yahoo may get some more advertisers out of this with the combination of Bing and Yahoo making up a greater percentage of the search market share, but it’s not like its going to draw advertisers away from Google, which still controls an incredibly dominant amount of that market.

And let’s not overlook the fact that when something eye-catching occurs in the search industry, and Google’s not the one catching eyes, they are usually quick to counter with their own offerings (or at least acknowledge that they will be forthcoming). When Bing launched and started highlighting all of its "cool new features," Google was quick to add a link to its homepage highlighting some of its own "decision-engine-like features."

Google - Discover the Web

As some discussed back then (namely Danny Sullivan if I’m not mistaken), Bing’s launch merely highlighted some things you could do with a search engine that other search engines (like Google, and in some cases even Microsoft’s own Live Search) were already doing. Bing’s launch has been more about branding than anything (despite the fact that it does bring some new things to the table).

I could be incredibly wrong, but I just don’t see this partnership between Yahoo and Microsoft having a tremendous effect on Google. Many want to see more competition in the search industry, and that’s a good thing. Competition can only make the industry as a whole better.

But Google is so dominant for a reason. People like Google. Like I said when Bing launched, even if the competition offers a product that is just as good or even better in some ways, it’s going to take Google dropping the ball and driving people away on their end to make a significant impact on its share of the search market.

Google is so far ahead, and it has been for so long. Think about all of the products that Google users are already tied into from Gmail to Google Docs to AdWords to Google Calendar, etc. Google search is always right there. Users have a lot of their online lives invested in Google, and switching is probably asking a lot to most of them. Yes, you can use both Gmail and Bing, but it’s about convenience and familiarity.

Microsoft has done a very good job combating the branding issue that has held them down in the search market for so long though. Bing appears to be doing much better than Live Search from that standpoint. We’ll see what happens.

Does the Yahoo Microsoft deal mean real competition for Google? Is Google sweating? What do you think?