///The impact of the Google – Yahoo advertising collaboration

The impact of the Google – Yahoo advertising collaboration

The saga continues. It’s been over a week since Google and Yahoo announced their advertising partnership, and the news is still sending ripples everywhere. New York Times admonished Yahoo! CEO Jerry Yang for choosing to “become a pawn of the most dominant company on the Internet”, while Tim O’Reilly defended Yahoo!’s move as a smart way to lose deadweight and focus on what they do best. TechCrunch’s Michael Arrington warned about the dangers of a Google monopoly and continues to note the ever-increasing number of top Yahoo! executives jumping ship (114 execs as of last count).

Who can blame these people for investing so much energy debating the subject? Online advertising is a $40 billion market and rising fast, eating away at TV and newspaper ad money. Google already has over 40% share of online ad revenues, and with this deal to serve their ads to Yahoo!, it’s poised to grow so much more. O’Reilly argues that it’s not that big a deal, because search isn’t the end-all and be-all in the Internet – there are various other platforms to be conquered, both known and those yet to come. I do get his point, but it still leaves me asking a few questions.

How long before a new platform weakens Google’s virtual monopoly? O’Reilly frequently sites the Internet as the dark horse that blind-sided Microsoft. What, if any, will do it for Google? True, nothing lasts forever, but even a few years is a long time, and damage may have already be done by the lack of real competition. The phrase “absolute power corrupts absolutely” has been thrown around a lot, but it’s true. I do love using a lot of Google’s services, but it needs something to keep it honest and on its toes.

What’s gonna stop Google from gobbling (buying out) the “next big thing”? They bought YouTube relatively early and gained dominance in online video distribution. Blog syndication became popular and they acquired the most widely used RSS publishing service, FeedBurner. They understand how important the mobile market, and now they’re launching Android. Google always seem to be one step ahead of the pack. I’m wondering if perhaps it’s not a new product or platform that will take the thunder away from Google. Maybe it will just become too big that it will collapse under its own weight.

How much more brain drain can Yahoo! take? While technology is important, it’s people that run a company, and employees are still its best asset. The alarming number of executives leaving just shows the continued loss of confidence of its own people. Unless drastic measures are taken by the top management to address this, I’m not sure how they can recover. For their sake, I hope Jerry Yang can come out of his shell and address the employees’ concern and give them a clear direction. In short, be a leader.

Yahoo! has let Google win this battle, hoping to regroup and win the war. That’s a tall order, and we can only speculate on their next move.

2010-05-19T22:07:00+00:00 June 24th, 2008|General|0 Comments

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