Around the Net
Google As Napoleon
- The Economist, Friday, August 11, 2006 2:30 PM
The cartoon accompanying this article from The Economist says it all: Google, having just announced two significant new conquests, now stands before the Web's middle powers (Yahoo, MSN, and eBay) like a colossal Napoleon, staring down at what looks to be three smallish rivals with a massive army behind it. In other words, the littler guys might consider banding together if putting a stop to Google's mounting power is on their list of things to accomplish someday. In fact, the article says Yahoo, MSN, and eBay are starting to look a lot like Russia, Prussia, and Austria in the days when Austria's Prince Metternich forged an alliance between the three monarchies to create "a balance of power" against Napoleon's France. Exhaustive metaphors aside, the article says the time is right for deeper relationships between the middling three, or an out-and-out merger. Here's why: Google's deal with MySpace owner News Corp. will only widen the already gaping search divide between itself and the rest, while the deal it struck with Viacom to distribute ad-supported content across its publisher network presages what could be a new business model for the entire online video industry. Indeed, most would agree this burgeoning sector was badly in need of new ideas. Losing out on the News Corp. deal was a particularly big blow to MSN and Yahoo, since they both conceded to Google in a partnership battle over AOL last year. However, new alliances have been struck: MSN and Yahoo recently conjoined instant messaging programs; earlier in the year, eBay and Yahoo struck a cross-promotion and technology deal that sees them sharing and benefiting from each other's services. These are steps, but analysts say they need to go further. Microsoft, with its multi-billions in cash, might consider taking over Yahoo, but then again, that could lead to AOL Time Warner-like corporate clunkiness. Yahoo and eBay could also take their partnership a step further, and merge.
