My countryman and business architect of Google, Omid Kordestani, pre-emptively answers some of the questions and addresses some of the potential criticism the Google/Yahoo non-exclusive deal might garner.
The scale tipped in Google’s favor when Yahoo! began to feature Google back in the early 2000s… it broke today. It’s game over…
My man is right:
This is not a merger. Rather, we are merely providing access to our advertising technology to Yahoo! through our AdSense program.
This does not remove a competitor from the playing field. Yahoo! will remain in the business of search and content advertising, which gives the company a continued incentive to keep improving and innovating. Even during this agreement, Yahoo! can use our technology as much or as little as it chooses.
This does not prevent Yahoo! from making similar arrangements with others. This arrangement is not exclusive, meaning that Yahoo! could enter into similar arrangements with other companies.
This does not increase Google’s share of search traffic. Yahoo! will continue to run its own search engine and advertising programs, and the agreement will not increase Google’s share of search traffic.
This does not let Google raise prices for advertisers. Google does not set the prices manually for ads; rather, advertisers themselves determine prices through an ongoing competitive auction.
But this does not change the fact: search is officially game over. Google is a monopoly and I agree to some extent with Google’s official position here: this may not be a bad thing at all, given how horribly Yahoo!, MSN.com, Ask.com and AOL.com have fared in this one-sided beatdown. Google will probably be able to leverage this deal to find growth and manage to eventually become more valuable than Microsoft.
Make no mistake about it: every time Google strikes a deal with someone to provide it with its “ad technology” they end up getting stronger and the expense of the partner (think AOL, Ask.com). In a few years, it will suck any remaining mojo out of Yahoo! and no one will want anything to do with Yahoo!, which will be sold off in pieces…
Of course, you are wondering, can Google buy Yahoo!? I’ve addressed it here… but with this deal, why bother?
Hats off to Google: you won the search game today…
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