Well, after the epic battle which lasted 1.5 year it finally has happened - Microsoft has bought Yahoo Search. I believe now Jerry Yang is watching on this deal with pretty complicated emotions. Now I clearly remember how it was not easy for Jerry to answer on John Battelle's questions about Yahoo's future as a company, as the company which used to dominate on a market, a last autumn on Web 2.0 summit. I guess at that point he already realised that it will happen but just wanted to do his best to change the future. There is an irony at this situation, back in early 2000 I remember the moment when Yahoo search technology served MSN search and now it's vise versa - Bing will do search for Yahoo. Taking into account the companies size and the number of products they have, good or bad ones, it's a real challenge to combine it. Here are few key points to highlight:
Who has won?
Basically you hear two opinions about it from industry analytics - Microsoft and...Google :-) But none of them points to Yahoo as the winner. Obviously, Yahoo has thrown a towel, they simply do not have a vision about the search and its future and they don't have the right team to beat Google and offer a superior solution and superior search experience for people. It's hard to say if there was a better way for them to go instead of selling the search to Microsoft. From what's known about this deal Microsoft will handle all search technology and will do all necessary R & D, Yahoo will do marketing, sales with big clients. The only benefit for Yahoo which is visible at this point is that Microsoft will pay Yahoo for search results gradually but nobody can predict will this deal do what Microsoft and Yahoo expect from it in a future?
A point which is being made about why Google might be the one who's achieved from this deal the most is the following. Before this deal took place we had 5 major players on the Search market - Google (65% of the market), Yahoo (~20%), MSN/Bing (~10..11%), AOL (~4), Ask (~2%). After the deal - only four: Google, Yahoo+Bing, AOL and ASk, and remember that AOL gets its search results from Google and, so roughly speaking, Google has ~70% of a market share and so we will have only 3 players. Now again we have to realize that before this deal will happen technically at least a year should went by and so Google will have a great opportunity to gain even bigger market share, today's Yahoo Search and Bing users, who is and will become aware of the situation with Yahoo, will likely prefer Google as a reliable and superior search tool. I really don't know how much market share will be left for Bing+Yahoo to gain in 2010...
Brands and Products.
What about tools like Flickr, Yahoo Local Search, Yahoo Maps, Yahoo Mail? At this point their future is not clear. Will Microsoft pick up their development with it's own developers team or let people, who has dedicated several years of their life to its development, to continue to work on these products. We don't know yet.
The search interface. Which way to go?
As I see it there are two possible ways - to leave Yahoo GUI as it's now and feed it with Bing search results and perhaps to put a little note 'Powered by Bing' or completely surpress Yahoo interface with the Bing one. It's no brainer that the first option is better but quite frankly GUI is the strongest advantage Bing has and it makes sense to use it for Yahoo Search as well. But if we can forget about technical details for ordinary people who might not know about this deal at all it's better to keep things intact. Imagine millions of Yahoo users one morning will try to perform a routine search and they won't see Yahoo GUI they've got used to! What will be their reaction?!
FTC approve
When it comes to a deal of that scale of course FTC is interested to investigate it and evaluate if anti-monopoly measures should be taken. So potentially a situation when they say 'No' and Microsoft and Yahoo will have to decide what to do with the deal is quite possible.
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