The rumors are once again on again/off again concerning a Microsoft-Yahoo merger. The UK Times Online reported this past weekend that the two had reached a tentative deal, with Yahoo going to Microsoft for $20 billion. That report, however, was quickly thrown into question by All Things Digital’s Kara Swisher, who cited Ross Levinsohn’s denial of a deal as proof of its “total fiction.” (Levinsohn had been named in the Times Online report as heading up the merged company.) And that whole fuss led The New York Times to urge Yahoo to turn the tables on Microsoft and buy up its MSN unit. But in the end, does it really matter? It’s all beginning to look like a battle fought after the war is over.
Even if Microsoft and Yahoo were to join forces, they would still have their hands full competing against Google, which has smartly used the ongoing uncertainty between its two main search rivals to pad its lead in the marketplace. The most recent comScore numbers show Google with a 63% U.S. market share, compared with second-place Yahoo’s anemic 19.6%, down from 20.5%. The New York Times article says Google’s lead could be significantly pared down were Yahoo and Microsoft to join forces, citing Yahoo’s belief in scale synergies:
Yahoo says it can reverse this with greater scale. That’s because the more searches a particular engine attracts, the more effective its search algorithm becomes, it says. In turn, the more accurate search results bring even more activity, creating a virtuous cycle.
But that would take a lot of searches and a lot of Yahoo-MSN synergies. And when was the last time you eschewed Google for Live Search (or is it MSN search, and how would you know where to find it anyway)? While Yahoo and Microsoft drag out their deal, Google just keeps humming along. In the end, it won’t make any difference. All this Microhoo angst is just a big “don’t care.”
