Yahoo: Beware Google AND Embrace Microsoft!
Google to the Yahoo rescue? Hardly. I have long underscored that Barry Diller sells IAC shareholders short by selling out Ask.com’s search advertising to Google.
In announcing the IAC plan to spin-off HSN, Ticketmaster, Interval and Lending Tress as four distinct publicly traded companies, Diller said his online advertising focused “Internet conglomerate,” of which Ask.com is a trophy property, will benefit from “standing on its own.” YES, but so would the competitive operations of Ask.com, far from competitor Google’s monopoly seeking hands.
Google is Ask’s prime competitor. While Google is a cheery proponent of coopetition, the only chance for an underdog to become the big dog is to rely on itself for its independent, proprietary future, rather than piggybacking on the success of the single, biggest, arch competitive rival. Yahoo has long understood the need to remain independent of Google and ought to continue to maintain the integrity of its core product offering, come what may.
My question for Diller last year was:
You indicated this morning that starting as the number five search engine is not a bad thing. Yesterday, you inferred that being the number four search advertising network may not be a good thing. Why are you willing to share Ask’s monetization with competitor Google when you believe “if there is no other ad network than Google, then we are all in trouble.”
Diller told Wall Street:
As far as doing it ourselves, we thought originally and we continue to do work in this area. We do do it ourselves; we do all sorts of ad products inside Ask.com for ourselves, for our own account. But as far as the ad network business, there are, as you know, three players in it currently. I think there probably won’t be a fourth. At some point, I can’t say what will happen out of the growth of advertising in this area, but right now, I would much, much, much prefer to rent it. I think that we will be well-served by that, certainly for a period of time.
Diller’s short-term sell out to his search enemy weakens Ask.com long term and strengthens Google’s winning position, at the expense of contendor Ask.com.
Microsoft’s bid for Yahoo changes the market landscape, but does not render a Yahoo capitulation and amputation at the hands of Google a worthy option. Microsoft is being straightforward about its intentions towards Yahoo, buy and control. Google, as is its fashion, offers a friendly carrot to Yahoo, while seeking its Googley end goal of usurping search advertising share to eliminate a strong competitor and using Yahoo to hurt Microsoft, Eric Schmidt’s despised foe.
Yahoo seemingly has no shareholder value option at this time other than to succumb to new Microsoft ownership. Yahoo owned by Microsoft is NOT the end of the Yahoo brand world though. Microsoft wants Yahoo and needs it as a full partner in a mutually beneficial attack against Google. Google, on the other number one hand, only wants to use Yahoo to further consolidate its search monopoly grip on the Web, for its sole Google shareholder advantage.
Microsoft is NOT a Yahoo enemy, Google is.
MORE: Is Union Square Ventures Changing Exit Strategies? and Microsoft’s Yahoo Bid a Winner: Google Running Scared! and Yahoo Shareholder on Microsoft Bid: AOL, Time Warner All Over Again? and Google Execs Silent On NYC Print, Radio, TV Promises