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Google reaction regarding Microsoft’s proposed purchase of Yahoo
Tuesday, February 5, 2008
Here’s what’s really going on:
1. Google doesn’t mind this deal going through at all. Google knows they will be able to outrun a “Microhoo.” Why do they know that? Because they’ve been able to outrun them both separately. As I said on Channel 5 news on Friday night: put two turkeys together and you don’t get an eagle.
2. Google stands to gain HUGE by slowing down this deal. Every month longer that
this deal takes is tens of millions in Google’s pockets. Why? Well, the real race today isn’t for search. Isn’t for email. Isn’t for IM. It’s for ownership of your mobile phone. I met the guy who runs China’s telecom last week in Davos. He’s seeing six million new people get a cell phone in China every month. So, every month that Microsoft and Yahoo will be stuck in some courtroom arguing out why this is a good deal means money in the bank for Google as they close mobile phone deal after mobile phone deal.
3. Email is not where the money is. Google knows this. So, who cares that Microsoft and Yahoo have a monopoly there? There’s only one way to make money with the 600 million who are on either Microsoft’s Hotmail or Yahoo’s email: get them to join other services where there ARE ways to make money. Danny Sullivan told me that this deal is all about search. He’s right. But you gotta be able to get those 600 million people to not just use your email, but come over and use your search. Google is trying to slow down these teams from doing that. But Google knows that even if Microsoft and Yahoo join email and do a pretty decent job of integrating search into there that Google will still see more growth in both email and search than Microsoft and Yahoo together will see. Why? Have you compared Google’s offerings to the others? I have (I am a Hotmail user). Even though I am locked into Hotmail cause my email address is all over the Web I’d rather be on Gmail and Google’s offerings are better integrated and better designed.
4. IM is harder to monetize than email is. Do we really think Google is concerned about either email or IM? If they were they’d be pouring lots of resources into Gmail and Google Talk. Hint: Google isn’t doing that. Why not? Because they aren’t taking their eye off the mobile ball. They are hoping that everyone else does, though, by sending this note. It sure did work, too. Damn the bloggers all took the bait and either called Google arrogant or hypocritical or annoying. Google is all of those things here, for sure, but they are damn smart and are doing this for their own purposes.
Now, we can argue about whether this deal is good or not, or whether it’ll work out for Microsoft or not, but people, don’t take your eye off of what Google is really up to here. Google is having fun by causing Microsoft to react, not to mention that if its little note is taken seriously this deal will be slowed down by six months or more while government regulators look it over. Even in the best of situations it’s going to take a year for these two huge companies to integrate and figure out how to work with each other. So, every month that this gets delayed is gold in Google’s pockets.
1. Google doesn’t mind this deal going through at all. Google knows they will be able to outrun a “Microhoo.” Why do they know that? Because they’ve been able to outrun them both separately. As I said on Channel 5 news on Friday night: put two turkeys together and you don’t get an eagle.
2. Google stands to gain HUGE by slowing down this deal. Every month longer that
this deal takes is tens of millions in Google’s pockets. Why? Well, the real race today isn’t for search. Isn’t for email. Isn’t for IM. It’s for ownership of your mobile phone. I met the guy who runs China’s telecom last week in Davos. He’s seeing six million new people get a cell phone in China every month. So, every month that Microsoft and Yahoo will be stuck in some courtroom arguing out why this is a good deal means money in the bank for Google as they close mobile phone deal after mobile phone deal.3. Email is not where the money is. Google knows this. So, who cares that Microsoft and Yahoo have a monopoly there? There’s only one way to make money with the 600 million who are on either Microsoft’s Hotmail or Yahoo’s email: get them to join other services where there ARE ways to make money. Danny Sullivan told me that this deal is all about search. He’s right. But you gotta be able to get those 600 million people to not just use your email, but come over and use your search. Google is trying to slow down these teams from doing that. But Google knows that even if Microsoft and Yahoo join email and do a pretty decent job of integrating search into there that Google will still see more growth in both email and search than Microsoft and Yahoo together will see. Why? Have you compared Google’s offerings to the others? I have (I am a Hotmail user). Even though I am locked into Hotmail cause my email address is all over the Web I’d rather be on Gmail and Google’s offerings are better integrated and better designed.
4. IM is harder to monetize than email is. Do we really think Google is concerned about either email or IM? If they were they’d be pouring lots of resources into Gmail and Google Talk. Hint: Google isn’t doing that. Why not? Because they aren’t taking their eye off the mobile ball. They are hoping that everyone else does, though, by sending this note. It sure did work, too. Damn the bloggers all took the bait and either called Google arrogant or hypocritical or annoying. Google is all of those things here, for sure, but they are damn smart and are doing this for their own purposes.
Now, we can argue about whether this deal is good or not, or whether it’ll work out for Microsoft or not, but people, don’t take your eye off of what Google is really up to here. Google is having fun by causing Microsoft to react, not to mention that if its little note is taken seriously this deal will be slowed down by six months or more while government regulators look it over. Even in the best of situations it’s going to take a year for these two huge companies to integrate and figure out how to work with each other. So, every month that this gets delayed is gold in Google’s pockets.
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