Could Microhoo Merger Create a Search Duopoly?
Microsoft's deadline for Yahoo to agree to its acquisition deal will have passed by the time this column appears. I expect we'll hear that Microsoft is moving ahead with a proxy fight to take control of Yahoo. Meanwhile, Yahoo's been testing Google's ads on its site as a potential way to stay out of Microsoft's clutches. If those ads perform as well as rumored, Yahoo might be able to up revenue and convince investors it should stay independent. Uncertainty aside, let's consider what might happen if Microsoft wins its way: A search duopoly will emerge, something that's never happened in the search world.
When I started covering search in 1996, we had several major players. Yahoo was the most-used engine, but services such as Excite, Lycos, Infoseek and AltaVista all drew significant traffic. In the late '90s and early 2000s, it was common for search websites to maintain "decoder" charts, helping you understand things such as how Microsoft's engine got listings from LookSmart, Inktomi and Overture.
|Photo: Jason Meyer|
|Danny Sullivan has been covering the search-marketing industry for more than a decade and is editor in chief of SearchEngineLand.com.|
What about AOL? AOL has traffic, but its paid and editorial results come from Google. Ask.com? The change in leadership and confused nature of its direction make it seem likely it will simply outsource everything to Google. Given this, it's no longer a service I deem worth watching closely. Yahoo? Let's assume it becomes part of Microsoft.
Pros: a stronger rival to Google, which potentially means the two services will fight more to win both users and advertisers. Cons: Creating Microhoo will take time, and Google could grow even more while the competition is confused. Even if Microsoft and Yahoo combine, there's no guarantee of success. Google's already considered by some to have a search monopoly, and it could grab more share. Or the two services get complacent without a plucky third or fourth service out there.
Finally, all those companies that said they'd be Google killers but never went anywhere? Part of the reason is that Google already had three or four established alternatives for users to consider. In a search duopoly, maybe some newcomer really will have a chance. I doubt it'll be a Google or Microsoft killer, but perhaps it won't be down to just two big players.