A Microsoft / Yahoo Merger Would Only Mean Good Things for the Search Engine Industry Over Time

Google, which normally plays it fairly close to the vest, went absolutely wild this past weekend, striking out at the proposed Microsoft / Yahoo merger.

Google pointed out that the deal would be anti-competitive, and that Microsoft has a history of establishing monopolies, and would no doubt be trying to do the same thing in the search engine space if this deal went through.

Many people believe that Google is just worried that its concrete hold on the search engine market is about to look a lot less ironclad. A Microsoft/Yahoo merger would result in a total market share of 30% in the US search engine space. Google, on the other hand, commands about 59% of total market share.

First off, for a company that currently has 59% of a market cornered (and growing by the month), talking about a monopoly seems quite laughable. Many think that Google is just striking back at Microsoft, after Microsoft commented that a proposed Google / Doubleclick merger would be anti-competitive as well.

Would a Microsoft / Yahoo merger really be a bad thing? Neither search engine is too impressive if you ask me. Both of their paid click systems are clumsy at best. I am hoping that if this merger went through, the combined company would spend much more in the way of research and development to ensure that their combined search engine was a much better one.

With Microsoft/Yahoo hot on their tails, Google would be forced to continue to maintain the high quality of their product, and they would be forced to continue to innovate. It really doesn't hurt the consumer at all if Google has a legitimate competitor - as a matter of fact, it's a great thing. Companies with too much market share tend to stagnate.

The thing is, Microsoft has the patience to slowly build up a viable search product that will eventually compete with Google. It might not happen overnight, but with an acquisition of Yahoo and 30% of the total search engine market share in the US, Microsoft will have the incentive to finally tackle the problem of catching Google. Microsoft has extremely deep pockets - they suffered through five years of losses in their XBOX division before finally establishing a strong foothold in the marketplace. If you don't think that they are fully prepared to do the same thing in the even more lucrative search engine market, you're crazy. Never bet against Microsoft.

For the consumer, a greatly improved combined MSN/Yahoo search engine would be a good thing. For the Internet marketer, a greatly improved paid click system would be a good thing. For Google? A MSN/Yahoo merger would be a nightmare, and that is why they are doing everything in their power to halt it.

Filed under: General Market News | Internet Companies