Jerry Yang smart dumb

I’m sure that Yahoo! chief executive Jerry Yang is a very smart man, but it seems that, like a lot of men, he is of the smart-dumb variety. That’s the only way to explain why he would want to sign a deal with his biggest competitor Google, which has in a short few years crushed Yahoo!’s own search business.

Yang, like a bride on the run, white dress trailing in the dust, has escaped the altar a second time, leaving Microsoft wondering what is with this guy? Good question.

Yang is being pursued by the equivalent of shotgun-toting angry fathers in the form of investors such as Carl Icahn. Yang’s luck can’t possibly last  — the deal he is trying to marry in haste with Google is bound to raise anti-trust issues.

I mean come on, Google already is the all powerful search monster (a great one at that) so how can it not? Yang must really hate Microsoft. It might only be a North American deal, but worth noting that in the UK alone Google accounts for 87.3% of searches alone. Yahoo! just 4%. 

Under the agreement that Yahoo! is signing, Google will supply some of the advertising on Yahoo!’s search engine and other properties.

It should give Yahoo! around $800m in revenues to bolster its dwindling business, but it appears an easy way out and not a brave leap into the future. Yang, it seems, needs to go as he would rather take the company down with him than do a deal with Microsoft or anyone else.

Granted it is a bit desperate when your only options are the devil or the moderately deep blue sea.

Yang, of course, says the deal is great for Yahoo! and in the short term it is fine, but to say it “strengthening our competitiveness” is probably overselling it.

The only real winner here is Google. It has found a very nice way to make money out of one of its rivals. Whoever gets that chance? This deal makes Google stronger than ever, it spreads its influence further and that (as much as I use Google Search/News/Mail) can not be good for the web overall and weakens Microsoft.

The funniest thing I have read about this story is a quote from Google chief executive Eric Schmidt;

“This deal in many ways reflects an emerging and new structure for the
industry. Certainly we’d like to do more business with Yahoo over time.”

He sounds like a man rubbing his hands together and sizing up what looks like a very tasty meal Unsurprisingly Schmidt wants to expand the deal outside of the US and Canada as he thinks it is going to be “very successful”.
 

 

 

  • http://www.ipodrepublic.com Daniel Tangen

    Though i agree with many of your points i doubt this deal will have any detremental impact on the competition in the search market, as we are talking purely about Yahoo having the option to utilize Googles Adsense technology, or so is my understanding from reading about it.

    Perhaps this might actually strenghten competition in some way, by giving Yahoo a better earning potential allowing them to focus on improving their own prospect and search functionality. As you said, there is a reason why Google has the marketshare they have, and its because they deliver people exactly what it is they want and they keep innovating. Merging Yahoo with Microsoft will not necessarily result in a better search service.

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