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November 26, 2003

Yahoo Declares War On Google

Yahoo! Inc. and Overture Services, Inc. today announced they have signed a definitive agreement under which Yahoo! will acquire Overture.

The last piece of the search battle has been put into place, but the war has only begun. All the competitors except for one are now in position and ready for the beginning of a serious and interesting battle between the titans of the online world. Here is the line-up of competitors that looks much smaller now with the battle really coming down to three companies Microsoft MSN Search (coming MSNBOT), Google and Yahoo. The AOL camp seems to be the glaring hole in the brewing battle. The other search players like AllTheWeb.com, AltaVista.com and HotBot.com are so far behind that they hardly register on the radar screen.

Microsoft, Google and Yahoo have been battling for years to gain online users and some have even become partners. The best example is that Yahoo used Google results for many years and then Yahoo acquired Inktomi search technology. Google gained dominance from riding the back of Yahoo for years and ultimately drove Yahoo to be concerned about Google’s fast growth. I think Yahoo felt threatened by the fast growth of Google and that it would eventually capture all or most of Yahoo’s users. Yahoo was right in thinking Google could sink the Yahoo franchise. I think because Yahoo relied on Google so much that they may have lost millions of users to Google, but I also must say that Yahoo may not have made it through the last few years without the Google search technology.

Then you throw in Microsoft’s interest in keeping MSN an important online brand and their recent announcement that they are building a crawler-based search engine and sponsored link program.

AOL and MSN should have long-term worries about the online power of Yahoo and Google. It appears that the major dial-up ISP’s AOL, MSN and Earthlink are running behind Yahoo and Google. MSN appears to be the one in the lead in this battle to make the needed transition from being a dial-up ISP to a provider of online broadband services and content. In my opinion, Yahoo and Google are sitting in a much better long-term position than any of the major dial-up ISP’s to dominate the online space.

This battle will ultimately decided by high-speed cable and wireless Internet access providers. I just don’t see AOL keeping its present dominance. I do see a clear separation coming between Internet access provider and content provider. AOL and MSN will not hold on to dominance online as ISP’s but as content providers to wireless telco and cable TV providers.

I think the Internet will be the technology used to deliver what we know today as cable TV, telephone and radio communications. We will most likely see major streaming media channels and online services being provided through those wireless telco’s, cable TV and radio network providers like digital radio and XM Satellite radio. The brands we know today will mostly be the brands we know in the future. My 5 year prediction is that the top online brands will line up like this: MSN, Google and Yahoo with AOL bringing up the rear.

I think MSN will be the ultimate leader online because of its coming search technology and its growing strength in content and streaming media. Google is about to go public and that will give them the cash they need to acquire more content technology. It will be fun to watch Google expand its wings and user base over the next few years. I think Google or Yahoo will acquire Real Networks and that will give them the leg up on AOL. It is a real possibility that Google could be the ultimate in online giants.

Article by Rob Greenlee
Source: Web Talk Guys Radio

Posted by karan at November 26, 2003 11:42 PM
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