If Yahoo! accepts the offer, the deal is not merely significant, it’s a blockbuster.
Google has been far and away the dominant search engine since, what, 1999? That market share dominance has translated into enormous search engine advertising riches that has allowed the company to expand into many different areas.
Google currently claims 77% of the search engine market share pie, with Yahoo! a distant second at 12% and Microsoft’s two properties, MSN and Live.com, at a combined 6%. That would give the combined companies a modest 18% share, but that’s enough to worry about how your search engine rankings will fare post-merger.
More significant, though, is the ability to leverage combined assets. If the new entity consolidates their search functions into one search engine, they can cross promote that engine among all their other properties: Yahoo Mail and Hotmail, Yahoo Local & Local Live, Flickr and del.icio.us and MyWeb and Live Spaces and within Microsoft’s software itself.
Only fools count Microsoft out because this is how they do. If they can’t compete on their own terms, they buy their way in. Just ask Netscape.