Google collects friends easily, but it also turns on them just as fast. It played the white knight to Yahoo, when big, bad Microsoft came knocking uninvited. And it also aided Microsoft arch enemy Sun in its anti-Microsoft crusade, not only by distributing Office competitor StarOffice with the free Google Pack, but also by creating a deal to distribute the Google Toolbar with every Sun Java Runtime Environment (JRE) download. But things change. It looks like that now both Yahoo and Sun are weakened players in the online marketplace, Google has no further use for them. And Yahoo and Sun, who are both now turning to Microsoft, have to be left wondering: Who's the friend, and who's the enemy?
First Google unceremoniously walked away from its ad-sharing deal with Yahoo, leaving an even more anemic Yahoo once again courting Microsoft. Next, Google removed StarOffice from Google Pack, and walked away from its toolbar deal with Sun. Sun, perhaps in retaliation, has also turned to Microsoft, and is now distributing the MSN toolbar with every JRE download.
The Yahoo situation was a clear cut case of preservation on Google's part. It stood to lose much in terms of dealing with a long dragged-out court battle and increased regulatory scrutiny, while gaining little financially. Plus, as the start date for the deal dragged on, the alternative--Microsoft buying Yahoo--not only became increasingly remote, but also less of a threat to Google. Even if Microsoft joined forces with Yahoo, Google probably reasoned, the new partners couldn't make a dent in Google's lead in the search arena.
For Sun, the casting off is sadder. Sun was the initial Internet company, and its JRE is still used on 91% of today's Internet-connected PCs. But it looks like its best days may have set behind it. Sun just posted a hugely disappointing $1.7 billion loss for its most recent fiscal quarter, while at the same time announced it is losing one of its brightest engineers. Chief Scientist Andreas Bechtolsheim plans to scale back his time at Sun to work at (more promising) start-up Arista Networks. Plus, Google simply doesn't need StarOffice anymore, now that its own anti-Office contender, Google Apps (plus Gears), is fast coming into its own.
Both Yahoo and Sun have been hung out to dry, and as the economic meltdown continues, they're probably realizing just how toxic "friendship" with Google can be.
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