MicroHoo: The effect on search and Web services

Is the acquisition of Yahoo by Microsoft enough to overthrow the reigning champ, Google?

Just about everyone else on the Internet has written on the potential acquisition of Yahoo by Microsoft for $44.6 billion, but I thought that I would weigh in on what I think this might mean for search and Web services.

According to ComScore's search share numbers for December 2007, Google has 58.4 percent of the market share, with Yahoo and Microsoft trailing at 22.9 percent and 9.8 percent, respectively. If Microsoft and Yahoo combine forces and change nothing, that will put them at 32.7 percent to Google's 58.4 percent. While those numbers are certainly not enough to overthrow Google, maybe the combined minds at the two tech giants can come up with something. Somebody has to try to make a stand, so that Google doesn't run away with the industry completely. That said, I think that Google is here to stay, even though this may be its biggest challenge yet.

On the Web services side of the issue, this acquisition is looking really good for Microsoft and Yahoo. Long Zheng has a great rundown of the services that Microsoft and Yahoo provide and where they overlap. The combined user bases of Microsoft and Yahoo's Web mail services far outpace that of Gmail (they actually both beat Gmail individually), so we will put one in the win column there. If Google Talk wasn't dead enough before, it sure will be now. Google has not even come close to touching either Microsoft or Yahoo in the instant-messaging market. One more thing on IM, if this acquisition goes through, a little service called AIM is going to finally be in their sights.

Microsoft will benefit from taking control of the leading photo-sharing site, Flickr, since its only photo-sharing solution that currently exists is through its Windows Live Spaces product. Several services from the two companies will likely be merged down the road, such as Upcoming integration in Live Events, Yahoo Widgets being integrated into the Vista Sidebar, and a merger of Yahoo Answers and Live QnA. Services that are likely to get the axe include Yahoo Maps, since Microsoft's Virtual Earth technology far outperforms Yahoo's, Yahoo 360 (or whatever it ends up being once it is done "transitioning"), and most likely some of Yahoo's music services.

$44.6 billion is a lot of money to pay for an acquisition, but Microsoft has deep pockets. The deal initially makes me a little nervous, but after thinking about it for a little while, I am feeling better about it. I'm not convinced that Microsoft will take away Google's search crown as a result of this acquisition, but it will instantly become a larger player. This acquisition will lead to almost complete dominance by Microsoft over Google in the Web services arena, but not necessarily in search.

About the author

    Harrison Hoffman is a tech enthusiast and co-founder of LiveSide.net, a blog about Windows Live. The Web services report covers news, opinions, and analysis on Web-based software from Microsoft, Google, Yahoo, and countless other companies in this rapidly expanding space. Hoffman currently attends the University of Miami, where he studies business and computer science. Disclosure.

     

    Join the discussion

    Conversation powered by Livefyre

    Don't Miss
    Hot Products
    Trending on CNET

    HOT ON CNET

    Want affordable gadgets for your student?

    Everyday finds that will make students' lives easier: chargers, cables, headphones, and even a bona fide gadget or two!