Thursday, May 25, 2006

Yahoo, Ebay and (not) Microsoft

Well, the rumors have been confirmed: eBay and Yahoo! are joining hands in the Great Struggle (against Google). Looks like a pretty straightforward deal, in that the partnership is really a swapping of inventory and assets. It's sort of like a great big media buy. There's mention of them jointly developing a click-to-call technology, but I imagine that's probably only because both companies have been cooking up click-to-call stuff in the past.

So, in terms of a deal, this is fairly superficial. Not that it isn't important. I just mean that no one is buying anyone and the companies have not merged to form some mega-corp. I imagine that my Yahoo log-in won't do much for me when I go to eBay and vice-versa. In fact, the consumer probably will notice this not at all.

The significance, of course, is in the positioning and the making of friends. You can't not see this alliance in the context of a surging Google. ComScore tells us that Google grew its share for the ninth month in a row, seemingly at the expense of its rivals.

Put into the mix a very determined Microsoft and you see how the power has shifted over the last few years. Microsoft yesterday announced (yet another) delay to the release of their next operating system, plus the news leaked out that Redmond's overtures to Yahoo! were rebuffed by Terry Semel. Now, the news is out that they were not a part of this deal, you have to begin to wonder where the next move is going to come.

My position is that you can never, ever count Microsoft out of any game. Yahoo is in a good position because they are shifting the game away from pure search toward being a portal--a position that they are infinitely more comfortable in (look at their history). Microsoft wants to make it an OS battle, space they're more comfortable in.

To put it more clearly: we are very clearly in the middle of the story, not at the conclusion. Yahoo is moving toward social media (something eBay's done since its inception). Microsoft wants to move toward OS. Neither entity is in their complete comfort zone just yet.

Is Google? Shoot...its so hard to pin down that company. I still believe that they have no short term strategy, only a long term strategy. The moves that they make incrementally move them toward this strategy. The thing that makes all this interesting is that each player seems to have a war chest they can use to get them to their own, private promised land. The result for the consumer may, in fact, be three very distinct and uniquely valuable services.
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Anonymous Anonymous said...

Hey! So what's Google's long term strategy?

1:05 PM  
Blogger Gary Stein said...

World Domination!

No seriously: I have been trying to put it into concise terms, but it doesn't easily fit. It is that Google believes that all data will be online and they will be the intelligent pass-thru point. All data, of course, includes not only Web docs, but also your photos, TV shows and who knows what else.

When the principals talk, this becomes more clear. They talk a lot about ubiquitous computing and intelligent sorting.

5:03 PM  

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