google and yahoo!

Wow. Another big (but hardly surprising) development.

Google has walked away from the controversial deal of selling ads in Yahoo’s search results. It’s interesting. If I was a cynic, I’d suggest that they walked away because in the long term they’ll have the same market share as if they had signed the deal.

So here’s the cynicism. Microsoft bids on Yahoo, Yahoo fights back, asks for too much and Microsoft withdraws the bid. Google seeing Yahoo with a shortage of cash and the expected influx from Microsoft non-existent walks up and gets the deal going, delaying the deal for the US DoJ to inspect. In the 6-8 months of delays Google

• Updates the quality score
• Updates the user interface
• Implements universal search advertising

While Yahoo does…. Nothing. The incompetent management (everyone good bled out in the Microsoft deal) sits on their arses and waits for Google’s money. Google seeing the competitive environment changed (incrementally, but significantly) realises that Yahoo is dead-in-the-water and that they will have Yahoo’s search share, sooner rather than later, and pulls out of the deal. Leaving Yahoo alone, in poor hands and desperate to sell up.

But that’s the cynicism.

I don’t know any other explanation for it, but one big questions hangs in my mind. It’s one for the textbooks I think, an example to sit next to Nike and the sweatshops.

Why Did Yahoo!’s Management Do Nothing? Why did they sit there and twiddle their thumbs hoping the deal would come off? Is this the best contingency plan they could come up with?

Damn.

All in all I feel sorry for Yahoo’s staff. I wish the best to them and hope they get to join some other company where their skills will be put to great use and they leaed happy and successful lives.

Yahoo! is dead. The lesson: Contingency plans, have one.

My bet is Microsoft will buy Yahoo, but for a lot less than the offer that was withdrawn. Your opinions?

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