They’ve flirted for years. Constant advances were spurned and due diligence seemed wasted but Ballmer’s finally got his gal. Well, sort of. This week has seen a sharing of search revenue, not a sale between Microsoft and Yahoo.
Despite her strong words of rebuilding and turning-the-tanker, we all assumed Carol Bartz’s number one play when she parachuted into Yahoo in January was to negotiate the sell. Is this a toe-in-the-water on the way to a full-blown takeover?
Of course, search is where the rubber meets the road on the Internet and as Steve Ballmer said, “This agreement gives us the scale and resources to create the future of search.”
Not so long ago Yahoo’s search was ‘Powered by Google.’ If only they’d realised they were creating a seesaw of strength: as Google grew, Yahoo shrank. Fatal error.
It’s a ten year partnering, not an acquisition, but Google must be hoping this is a bit like the dog who chases cars and finally catches one. Can the undisputed also-ran in second place actually do anything different? Will the partnership lead to growth or confusion? What about the raft of other questions this throws up?
And, just in case you missed it, Amazon bought the highly respected Zappos earlier this month for about $937 million. I’m thinking the web just got a bit smaller but a couple of big players have sharpened their teeth further.
Well, that’s my prediction. They’ll stop burning dollars acquiring paper mills and fork out $750+ million for Twitter.
Twitter is the most popular and certainly the most talked about social media tool of the moment, yet there’s no clear indication on how they’ll monetise the whole shebang. They raised another $35 million in venture capital last month but to what end?
If you concede that Google want to know far more about you and your digital habits along with the world at large, this source would make an obvious acquisition. The speed at which trends and news appear on Twitter is unmatched elsewhere on the web. Google could leverage this into their algorithm and gain much more real-time searching (certainly opposed to Google News).
Of course, we’re not privy to the magic that’s being created right now in Mountain View where Google’s rocket scientists wave their wands over the web with reckless talent. Have they got a Twitter-killer waiting in the wings? Personally I doubt it. And if they have, will it be another Google Video which was always the poor cousin to YouTube – remember Google later bought YouTube purely to get that online video foothold?
They’re into harvesting strategies and don’t need to monetise everything immediately. Again, YouTube teaches us that. So the lack of income at Twitter won’t be such a problem; the data is the treasure worth the capital outlay. Although, Twitter wont keep its monopoly forever – when you show the market what’s it’s capable of, it rarely stands and applauds for long. Immitation is immenant.
Then again, others might get to the buy-out first. Facebook is reported to have offered $500 million and Carol Bartz could do with creating some buzz about Yahoo other than dismal reports of staff exoduses. Either of these firms would be salivating at the thought of gaining those 6 million Twitterers and all that live data.
What do you reckon? Do you think Google will crush Twitter, buy Twitter or just look at it like a play-thing in the corner?
