After Microsoft failed to woo Yahoo! folks in order to acquire and integrate Yahoo! technologies with those of  their own, some have claimed that Steve will invest the money he had set aside for Yahoo! in search technologies that could allow Microsoft to challenge and dethrone Google as the leader of the pack. Now that is all exciting but who really believes that Microsoft will actually do that. Will Microsoft buy a few small companies to fill some small gaps? Absolutely. But at this point, I think even Microsoft doesn’t believe that they have a chance to effectively challenge Google without Yahoo!

Microsoft has not really been a front runner in industries that its involved in. Microsoft loves to play catch up, and that is what it has done for the past few years in the gaming industry, the search industry, and a few others. So we can be sure that Microsoft will not come up with a revolutionary search technology that would upstage Google. It’s not as if Microsoft has been gaining a lot of ground on the top two anyway, so the most logical thing for Microsoft will be to wait for Yahoo! to stumble again and come back to the table with another offer.

For Yahoo! it’s pretty much the last chance right now. Jerry Yang can’t fail in his mission to bring value to Yahoo! shareholders or he will be forced out. Yahoo! shareholders are very nervous these days, and who knows if they can resist another offer buy Microsoft (not that they did the first time).

So much for not going a dime above the original offer, as Microsoft claimed when Yahoo! rejected its initial offer. Major news sources are now claiming that Microsoft has upped its offer by “several dollars” in an attempt to finish the deal with Yahoo! as soon as possible. Yahoo! turned down the first offer, considering it to have undervalued Yahoo!. However, it will be hard for Yahoo!’s board of directors to turn down the second offer as Yahoo! has not exactly been setting the world ablaze with their performance in the past few quarters.

For Microsoft, this shows a high degree of desperation to compete with the almighty Google in the search market. Google has singlehandedly dominated both Yahoo! and Microsoft over the past years, and there doesn’t seem to be any indication that will change, regardless of Microsoft-Yahoo deal. At the same time, Microsoft can not lose this opportunity to mount a meaningful challenge against Google. Steve Ballmer has claimed numerous times that he could do without Yahoo! if Microsoft’s offer for Yahoo is rejected, but deep down he knows that without Yahoo! Microsoft will have a very small chance of challenging Google. But here is the catch. Even with Yahoo!, Microsoft will not be able to kill off Google. Besides, one has to think about the challenges that this acquisition will cause for Microsoft (e.g. integration, employee retention, clash of cultures).

For what it’s worth, it’s more intriguing to see Yahoo and Microsoft combine forces against Google. It will probably push Google to be even better than they are today. But with only two major entities going at each other, we are left with almost a duopoly. More competition always help, so it’s a shame to see the likes of Ask! throw in the towel.

If you thought the whole Yahoo! – Microsoft saga was over, guess again. Yahoo! shareholders are now suing Yahoo! for neglecting to take into account the company’s main responsibility, looking out for the shareholders. It seems Microsoft will have Yahoo! all to itself pretty soon.

Can Jerry Yang really save Yahoo! from demise? Well, if he thought he could do it just because he was one of the founders, then he is mistaken. Pension funds are now aiming to sue Yahoo! for neglecting its responsibility to its stakeholders to maximize their investment value. I personally prefer Yahoo! to join Google than Microsoft (even though it’s impossible) but Jerry needs to accept the fact. It’s over for Yahoo!

It’s quite simple. The Search Industry needs Microsoft as almost all other challengers have fallen to Google for the battle of supremacy. Everyday that passes by, Google gets stronger, and quite honesty lack of competition can only hurt consumers. Nobody is claiming that Microsoft is going to revolutionize the industry by acquiring Yahoo. In fact, Microsoft has been a lousy leader in every industry it has entered in. But now at this point in time, Google needs a true challenger and Yahoo! and Microsoft aren’t it. In fact there is no guarantee that MSNYahoo will challenge Google, but it certainly has a better chance of competing with Google. Yahoo! has been a true superstar in the Internet era, but the time has come for its CEO and his buddy to pack their bags and leave Yahoo! with a company that is hungry enough to challenge Google. Microsoft might not be the best option but is the only viable option at this point (that is until someone else steps up to challenge Google).

I know a lot of people have been moaning and complaining about Microsoft killing off Yahoo! and making the search world worse for it. I personally don’t agree with all the speculations. But if you are a Yahoo! executive, this Microsoft thing is the best thing that is going for you right now. Since Microsoft announced that they were willing to buy Yahoo! for $31 per share, Yahoo! has experienced a surge in its share price. Of course, if you think about the fact that Yahoo! is nowhere near challenging Google in the search market, and the future looks not so rosy for the company, having this surge has definitely brought some hope to investors who want to sell their Yahoo! shares with a smaller amount of loss.

I do believe that Yahoo! is better off selling to Microsoft before it’s too late, but I wonder if they will ask for more money now that their stock price has gone up. I guess we will have to wait and see, won’t we?

I am sure you all have heard of this new development that is Microsoft trying to buy Yahoo! in order to effectively challenge the big dog Google in the search and online advertising market. Many industry experts have come out to explain why they believe Yahoo! + Microsoft will be challenging Google in the upcoming years. I completely disagree with this. I actually believe this is not such a good move at all. Not for Yahoo! anyway:

• Yahoo! and Microsoft have relatively different corporate cultures. It would be especially hard for Microsoft to dictate its culture over Yahoo! employees without turning a few off them off. I would expect a fairly high turn over ratio once Microsoft acquires Yahoo! This is all better news for Google. Google doesn’t need to acquire Yahoo! really. They are better off acquiring the brains that made Yahoo! successful, and you can bet that they will try to woo the Yahoo! crowd from Microsoft.
• One would wonder what synergies Microsoft is after by combining these two giant entities. Is Yahoo + Microsoft really less than [YahooMicrosoft]? We shall see, but unless we are talking about scale, I can’t see any other reason why Microsoft would go after Yahoo! I know, Microsoft will become the clear No. 2 guy in the search market, but I guess one should wonder what Yahoo! has to offer to make Microsoft a legit contender for that No. 1 spot.
• Microsoft will probably kill Yahoo! by acquiring the company as the two have somewhat incompatible culture and business philosophies. At the same time, we will be left with an industry that is basically a duopoly now, and we can expect less competition in this industry which will be bad for the users. Let’s hope someone else rises up to challenge Microsoft or Google.

Whatever happens, Google will still protect its lead in the online advertising and search market. I do expect Microsoft to push Google hard, but it is interesting to see how Microsoft approaches their new role as underdogs in this market. Google is the clear front-runner, and Microsoft has shown in the past that it is clearly not a good front-runner, so maybe Microsoft is better off being No. 2. In the meantime, I believe Yahoo! should really accept this generous offer by Microsoft. Yahoo! has been a great company, and it’s one of those brands that we will remember for a long time to come. At the same time, Yahoo! management has shown that it has run out of ideas on how to effectively challenge Google, and maybe it is time to move on. Whatever happens, the second half of 2008 just got more exciting!

It was announced earlier today that Microsoft has offered to buy Yahoo! in an almost $45b deal. While I am not sure whether Yahoo accepts such deal, if it does happen, we are going to see two search giants combine to take on Google. This technically means that the industry is becoming consolidated and one would wonder where a company such as ASK would stand in the search 2.0 era (that’s what I like to call the search duopoly era).