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...panic. Above all, remain calm. Or if you are already calm--in fact, I see a few of you dozing in the back row there--then wake up! An enormous convulsion is taking place in the Internet economy. Microsoft, the world's largest software company, wants to buy Yahoo!, which is (in its own words) "the world's largest global online network of integrated services," whatever that means, for $44.6 billion. Yahoo! is resisting. It's a complex, many-sided deal with repercussions in all directions. What does it mean for you? How will the world be different? Will your...
Your world is changing, friendo. Separately, Microsoft and Yahoo! are the second and third most trafficked properties on the Web. Together, they will be the first. (Guess who will be the new No. 2? That would be you.) Separately, Microsoft and Yahoo! have two not-bad search engines, two so-so consumer brands and two all-right online-advertising systems. Together, they will still have all those things, plus the added nightmare of integrating them. Separately, Yahoo! and Microsoft are Goliaths. Together, they will be ... an even bigger Goliath. O.K., maybe your world won't change that much...
This is a deal about brute scale, about huge numbers. For example, if you squish Hotmail (Microsoft's e-mail service) and Yahoo! Mail together, they have 426 million users worldwide; that's compared with Gmail's paltry 90 million. But don't let those huge numbers distract you from two very small ones. First, the number 1: that's where Google stands in the search business and in the online-advertising business, the latter of which--unlike search or e-mail or instant messaging--actually has real dollars attached to it. Second, the number 0. That's how many...
...fine, probably. The only scary thing is, Microsoft has a history of trying to turn big numbers into industry dominance even when it doesn't have lots of good ideas. It's done this in software through its near monopolies in operating systems and Web browsers. If Microsoft eats Yahoo!, it will also have dominance in Web-based e-mail, instant messaging and Web portals. That's got to be a temptation. Sure, Google is "the No. 1 search player," a source close to Google argues. "But users can click away and use another search engine. Microsoft has monopolies. Governments...
That brought to mind the brief history of search-engine domination. If we trace the roots of our Internet behavior back to the Net's wild-west days in the mid-to-late '90s, most of us were probably launching into cyberspace from a portal page like Yahoo's, or through Excite or Lycos (remember them?). And by the new millennium, search engines, especially Google, had become the place to begin and end our Internet days. Then came Generation Y and the social network. What began as a younger-user phenomenon quickly caught on with 25-to-34-year-olds...