State Of Search: Google Will Stay Strong Despite Bing & Yahoo

Just because a product — toothpaste, laundry detergent, whatever — calls itself “new and improved” does not mean consumers will abandon a brand that they already use and like. Microsoft’s new search engine Bing faces this same challenge in taking on Google. Google’s not broken; people like it, and there’s no compelling reason for them to switch to Bing, much less the more established Yahoo.

Consider this a “state of the major search engines” from my perspective — how they’re likely to fare against each other in light of Microsoft’s latest salvo in the search wars and Yahoo’s weakening position. I wish so much that I could say either Microsoft or Yahoo pose an immediate major challenge to Google. I wish it not because I feel Google is doing anything wrong but rather because I think search overall does better when you have several healthy competitors. And while I might wish it, I can’t say it, because I don’t see it.

Before getting into the analysis, I urge anyone to see the two companion pieces on Search Engine Land to this commentary that take a close look at Bing:

But Search Is Broken! (Isn’t It?)

Microsoft will tell you there’s plenty broken with search. I’ll give you the main points they’re using as part of the Bing launch to back this up, from internal research they’ve conducted with searchers. I’ll even bold the key parts:

  • 72 percent of say search results are too disorganized
  • 66 percent of say they use search engines to make decisions
  • 50 percent of searches fail to meet a consumer’s needs (the search is abandoned or further refined)
  • 35 percent of express dissatisfaction with search today (and the percentage increases as they get task specific, such as focusing on local or product information)

From this research comes today’s new positioning of Bing as a “decision engine” by Microsoft. After all, if the majority of people say they use search engines to make decisions, what better way to distinguish Bing from Google than to expressly call it a decision engine?

If you buy that (I don’t, as I’ll explain in a bit), what else does the research tell you to do? Organize those results! Ensure people can refine those results! And so Bing unveils a new “organized” design to its search results, the most dramatic change aside from the new brand name itself.

Searchers Just Want A Search Engine

Maybe Microsoft is right. Perhaps the $80 million in marketing it will do might build the idea that people need a decision engine — and that Bing is the solution they’re after. Maybe it will be a way for Microsoft to get ahead of the curve, to “skate to where the puck is” rather than play catch-up to where Google already leads. If decision engines are the next wave — if they can build that idea — that might have Google following them.

But I don’t think so. I’ve not done a huge survey as Microsoft has. Instead, I’ve simply talked with a variety of people over the years about how they search. It’s not scientific. But rarely have I encountered someone who seems to think, “Hmm, Google’s good for general searching, but sometimes I need an X engine, a Y engine or a Z engine.”

More often, it’s the opposite that I’ve found. People search for images on Google without even using its own dedicated image search engine. People search for news on Google without using its dedicated news search engine. People search for products without using its dedicated shopping search engine. These services aren’t even newfangled conceptual products. We’ve had image search engines, news search engines and product search engines for years. Searchers still gravitate to that black hole of the search box on the Google home page, ignoring tabs or links or whatever you place to attract them into a better experience.

That’s why Google moved to Universal Search search in 2007, blending in results from various “vertical” services like news or image search as makes sense to a particular query. That’s why we had an acceleration of blended search that same year, because searchers largely fail to seek out specific search engines even when they’re available. Not always, but in many cases.

Google’s one-stop shopping for many types of search. Or a Swiss Army knife that that does many different things. It might not be the perfect tool for a particular task, but it’s often good enough to get the job done — and so it keeps getting used.

So I don’t think most searchers will be thinking, “Ah, I need to make a decision — where’s a good decision engine?” and start looking around — especially when we already know that they DO think they need things like news or images and yet specifically DO NOT seek out those types of specialized tools. Instead, they’re going to turn to their general search engine of choice — which for most of them, is Google.

The Google Alternative

If you want to win big against Google — which is what both Yahoo and Microsoft want to do — then you need to be a leading alternative to them. That doesn’t mean being a radical alternative. It means providing the same type of service that can help someone if for some reason, the first choice (Google) isn’t available.

I’ll go with a rental car analogy. Hertz is the market leader (“We’re Number One!”). Avis is second to Hertz (We Try Harder!). I typically rent with Hertz, sometimes even if it’s a bit more expensive. I’m a gold member, so I have an established relationship that means I walk right up, my car is waiting, and I’m gone.

But I don’t always rent with Hertz. Sometimes the price difference is too much. Sometimes they’re out of cars. In such cases, I need an alternative. I’m not looking for something radically different than Hertz. I don’t seek out a moving van company, nor do I decide it’s time to rent an exotic car. I just need another company I can depend on to rent me a basic car at a good price. I call Avis.

Google is Hertz. Yahoo and Microsoft’s Bing are alternatives to Google. To me, the problem they have isn’t that they aren’t distinctive enough from Google. Being similar is actually a strength, I’d say. The problem is two-fold. Many people have a healthy, preexisting relationship with Google (the Google Habit), and many people are completely unaware that there is any alternative to Google.

Promote yourself as an alternative to Google, and you start to work on the awareness problem. Show specific examples of how you can beat Google — which isn’t perfect — and you start breaking down the relationship.

Hurray For Bing!

Taking this to Microsoft, by far the most important thing happening is their name change. “Live Search” was a meaningless term. I can’t say that Bing is a great name. Part of me still wishes they’d gone back to “MSN Search” and the brand equity it had. Part of me wishes they’d moved forward and embraced their strongest brand, rolling out “Microsoft Search.” But you could hardly say that Google or Yahoo were great names when they started. They were just odd-sounding names, which turned into brands as they grew their reputations.

The name change is a huge step toward combating the awareness problem, though it might be hindered by the relatively minor (in my opinion) design changes that are also coming out at the same time. Combined, it builds up too much hype that Microsoft is unleashing some radically new service that really isn’t all that different from what was already out there. The name change alone, I feel, could have attracted buzz without hype and risking disappointment.

The push as a “decision engine,” as I’ve already said, I feel is a mistake. I want Microsoft to be gutsy. While television ads generally have not worked to raise a search engine’s market share in the long-term, I can’t fault Microsoft for trying. But I want them to try directly against Google. The campaign apparently will not name Google specifically. It should. Get out there. Use a tagline of “The Google Alternative,” do a “Pepsi-challenge” with particular queries, show features where Bing shines.

Apple’s anti-PC ads have been widely credited in helping it build share; similarly, Microsoft’s ads touting that Windows machines are less expensive than Macs have been praised for helping it win back some share. People know Google. Help them know there’s an alternative to Google by directly naming yourself as one to it and show them specifically how you can be better.

What About Yahoo?

While Microsoft aspires to be the Hertz of the search engine world — the leader — currently it’s not even Avis, in second place. Instead, it’s like Alamo — out there in third (to my knowledge of car rental market share, which isn’t perfect!).

Yahoo is the second place search engine. Unlike Microsoft, Yahoo doesn’t suffer a huge awareness problem. Plenty of people know it’s an alternative to Google. Indeed, when Google suffered its malware meltdown last January, Yahoo saw a marked rise in traffic for an hour, until Google came back up.

Certainly it would have been better if Yahoo had kept more of those new searchers for longer than that hour. Certainly Yahoo’s marketing campaign last fall — which DID mention Google — doesn’t seem to have drawn in many new users. Certainly unlike Microsoft, Yahoo’s maintained a relatively stable search experience, which I tend to think reassures searchers more than moving-the-deck-chairs-on-the-Titanic redesigns do. Yahoo’s also got good relevancy, nice features — what’s wrong!

I don’t know. In one respect, things are actually working. Yahoo’s generally maintained a solid search share in the face of Google. It’s also actually grown queries, even if on a percentage basis, it might seem to have declined.

One issue might be that Google continues to add many non-search services, portal features that bring people in and maybe hooks them into searching.

Perhaps another important issue is that anyone considering Yahoo as an alternative to Google might be put off by the Yahoo home page — cluttered with content that almost screams out that Yahoo is NOT a search engine. There is a pure search page, but who knows to find it? Google folks might search there if they have to, but it sure isn’t going to feel like home.

Maybe Microsoft is right, and someone needs to be especially distinctive against Google. Or perhaps Microsoft will have an advantage in Bing, which features a home page that’s far more search-like than Yahoo presents.

Yahoo’s Internal Weakness

Behind the scenes, Yahoo is incredibly, disappointingly weak. None of that likely matters to the average searcher. I’m sure plenty have heard of Microsoft’s interest in Yahoo and maybe some of the CEO turmoil that’s gone on. But I doubt this factors in their decisions to search there or not.

It certainly does factor into Yahoo’s ability to keep its second place position. Microsoft still wants to acquire Yahoo’s search assets, and Yahoo’s certainly open to selling them. It feels inevitable, to me, at this point. It’s not like Microsoft’s going to give up, and tough though she seems, new CEO Carol Bartz seems likely to feel shareholder pressure as her honeymoon period runs out.

Bartz spoke at the D Conference yesterday, and reading her comments from afar, I was pretty shocked in a variety of ways. I felt like she kind of wounded her own company in the search space.

Yang got reamed for a poor definition of what Yahoo was at D last year, but Bartz’s definition this year didn’t sound that great:

We’re the place where people find relevant contextual information about things they care about.

Relevant contextual? Huh? Buzzword buzzword. Things I care about? Like is my email relevant contextual information? Or is that my IM? And where’s search in all this, Yahoo’s second largest revenue source last quarter?

Well, Bartz did name search as one of Yahoo’s most important products. But then in how her company is positioned against Google, we get this summary:

Google’s a fierce competitor. They’re very good in search, very good in maps. But they don’t have the positioning and reach that we have. We are totally different companies. How we got drafted behind Google, I’m not sure. We are a place people come to be informed. Google is a place people go to do search….We want to be more personal than Google. We are about providing a more integrated experience. We are a different company than Google. Kara jumps in to ask if that means Bartz isn’t committed to holding on to the company’s 20 percent share of the search market. Bartz says it does not.

How Yahoo got drafted behind Google? How on earth did Yahoo get drafted behind Microsoft, is the question. We know how Google beat Yahoo in search — it provided a better service for longer and took people away.

Yahoo wants to be more personal than Google? Because why? Because if Google’s just a place people go to search, what’s so personal to beat? Except, of course, things like Google’s personalized web search results, which improve relevancy for some users. Or personalized news. Or personalized home pages that don’t interfere with search unless you want them to.

If search is an important product for Yahoo — if Bartz wants to maintain the 20 percent share she has and grow it — then you damn well get the word “search” out there about yourself in any comparison to Google. “Integrated experience with search,” or “…come to be informed and search” or whatever. And you especially do that when you keep losing top search talent to Google, Microsoft or elsewhere.

And that leads to more Yahoo weakness. It has the traffic, and will likely continue to keep much of it through momentum. But it has lost search talent, and the technology won’t maintain itself. Those losses, to me, make Microsoft feel like it’s in a stronger position to strike a deal, sensing that Yahoo is soft despite tough talk.

Sell Search Or Don’t, But Decide Soon

And we don’t even get tough talk. Again, at the end of last year, former CEO Jerry Yang got ridiculed for suggesting that Microsoft should still seek a deal at the right price. But yesterday, I saw plenty of praise for Bartz basically saying the same thing:

“If there’s boatloads of money and the right technology involved, would we do a deal? Sure,” says Bartz. “It’s that simple. Not like a big secret what happens when you do a deal. It’s realism. Would sell for the right money, the right data and technology. So Yahoo is willing to sell search if the money is right and the technology is there? Bartz: “Yes.” What about the whole company? “They’d have to have biiiiig boatloads of money, though.” Are talks between the two companies still going on? Bartz says: a little bit.

Clearly Yang should have said “boatloads,” in order to escape scorn. Meanwhile, Yahoo’s search future effectively remains in limbo. I appreciate the honesty in saying that for enough money, Yahoo would have to consider any deal. But that’s removed from the actual context — which is constant reports that the companies are actively talking more than a little bit.

As long as this uncertainly hangs out there, uncertainty hangs over Yahoo Search in general. For example, do you develop for things like SearchMonkey if you’re not sure the program will be supported if Yahoo Search goes to Microsoft?

And sell the entire company? Good luck. Seriously, good luck even trying. After Microsoft led an anti-trust campaign to quash a proposed Google-Yahoo partnership (not even an acquisition), you can expect Google return the favor complaining that a sale of Yahoo would give Microsoft too much share of the email space, or the IM market, or the portal/start page space or you name it.

Realistically, Yahoo’s likely to sell its search assets to Microsoft and retain the rights to the search data stream, to help with display ad targeting and a myriad of other uses. But search is a crown jewel. Sell it, and Yahoo potentially becomes another AOL — one fighting against ironically Microsoft, which is still going to continue pushing a portal of its own.

Revisiting Tough Love

How might a Yahoo Search purchase help Microsoft. Let me answer that in the context of my piece at the end of last year, Tough Love For Microsoft Search. In that, I outlined a number of reasons why I felt that Microsoft was failing in search. Six months later, any change?

The Search Chore: I felt like search was something that as a company, Microsoft felt it had to do, not that it wanted to do. I’ve heard from many within the company since then that by no means is it seen as a chore. I’m neutral on this — I want to see how the next six months unfold.

Search Isn’t Software: I felt Microsoft views search too much as features that have to be rolled out on a set schedule. I’m afraid I still feel this way. Though, that might not actually hinder them. It’s just a difference between how they and Google operate.

Forget You’re Microsoft; Forget Integration: I felt that Microsoft hurt itself trying to make its search product work too much with only Microsoft technologies. With Bing, you can’t save your search history to your local computer unless you use Microsoft Silverlight. Enough said.

Fix The Damn Brand: Live Search needed to go. It did. Good!

Microsoft Search: I suggested they go with Microsoft Search as their new brand and clear the home page of of all but a search box. Radical, and I wasn’t the first to suggest it — and not surprised they didn’t do it. Can’t guarantee that it would have helped, but wow, what a signal of seriousness that would have sent.

Forget The Consumer Advertising: I wanted Microsoft to do road shows rather than TV commercials. Given they have the money, I can’t see that the commercials will hurt. But I think they need to get out in front of real people, as well.

Distribution Opportunities: Microsoft keeps striking these. Hard to see what fault, other than that the deals don’t necessarily prevent people from going to Google, where it in turn might suggest to visitors that they reset themselves to Google.

Product Consistency: Well, I’m convinced we’ll see Bing do a major redesign before the end of the year. And I think it will need it. But after that, Microsoft needs to lock things down. I feel redesigns are a sign of not working on the bigger, under-the-hood issues and/or they send a message of inconsistency to searchers.

Executive Consistency: So far, so good with major Microsoft search execs not being moved around. If after six months Bing doesn’t skyrocket off the charts, I’ll be disappointed if Microsoft does another round of house cleaning. Their bigger problem isn’t needing fresh blood and new ideas. Rather, they need folks with major dog years of knowing search, so that they don’t repeat the same mistakes.

Developers & Webmasters: I still don’t think developers are going to be a secret weapon for Microsoft, but I do think they should be looking toward them with reasonable expectations — and the more tools for webmasters, the better for support with that important influencer audience. Remember, anyone with a blog, home page, web site, you name it — they all have concerns over listings. Support them, and you support a wide range of people.

The Long Term Game: The usual Microsoft excuse, but it’s also true. And in some ways, they’re back to square one with this fresh launch. It is a long fight forward. But while I don’t expect Microsoft to make huge gains in share, they’ve got to stop the losses and start gaining in some consistent, notable way over the coming year or two. That’s also where Yahoo comes in. Buying Yahoo Search would give Microsoft a swift rise in share, but such a deal will only be successful in my book if Microsoft then maintains or grows its overall share — and especially on its own Bing site. If Bing doesn’t grow, Microsoft hasn’t secured its search future fully.

Ballmer On The Front Lines: My most personal point, I noted that Steve Ballmer had never spoken at a search conference, an experience I felt would help enlighten him and send a clear message that Microsoft viewed search as coequal to other products like its operating system or software applications. Let’s say I’m cautiously optimistic this will change.

Search Ain’t Broken

If you’ve made it this far, congrats; I’m wrapping it up. I wanted to end with a question a reporter asked me recently. Why search is so broken right now? Broken? She felt it must be that way because there had been so many big announcements in the past few weeks.

The announcements aren’t because search is broken. Search works. Search works great for many, many people, every second of the day. Saying it’s broken is like saying that a car that gets 30 miles to the gallon is broken. It’s not — it still gets you from point A to point B effectively. It’s just that it can be improved. Maybe some changes get you 40 miles per gallon. Maybe you gain some new airbags. A better sound system. But the car itself really improves incrementally. It’s rare that you through out an entire system for something radically different (goodbye horse, I’ve got a car now!).

Instead, the announcements are largely due to posturing.

Microsoft needed to change its search brand. That really was broken. And as part of that, it made the brand change coincide with feature changes that to me are still largely incremental, small — not revolutionary.

Knowing this was coming — and that Microsoft’s marketing would cause many in the press to question Google’s leadership — Google did effectively the same thing that Microsoft did. It wrapped many relatively small changes together in a nice branded package aiming to get maximum oomph and deflate some of the wind from Microsoft’s sails.

That brand was Searchology. Held for the first time in 2007, then not in 2008, it came back out of nowhere just two weeks ago, conveniently ahead of the Microsoft launch. Nothing presented for use by ordinary searchers was particularly groundbreaking. Nothing was a game changer. But plenty of positive press reviews came out of it, and Google got itself well positioned in front of reporters who will be writing on Microsoft’s Bing this week.

The following week, Yahoo decided it had better get its own act together. So even more hastily than Searchology, it pulled together its own event, spotlighting Yahoo products that weren’t particularly new.

So Microsoft needs to improve, and even though its competitors are stronger, they felt the need to step up. And that’s a good thing — that’s the advantage to having competition, but it can make things seem more revolutionary than they are, at the moment.

Search Is Exciting!

Almost done. While I questioned the idea of Microsoft as a “decision engine,” and whether people would seek one out, there is actually a unique and interesting new tool like this. Hunch. In private beta and backed by former Flickr cofounder Caterina Fake, it illustrates how much Microsoft is NOT a decision engine. Consider these screenshots:





Compare those to the searches you’ll be able to do on Bing when it opens up, which pretty much is similar to Microsoft’s Live Search now. They’re radically different. Hunch walks you through a decision process. Bing does not.

I think Hunch has a good chance of attracting a small core audience that really wants a decision engine like this. Small is relative, compared to the huge audience that the major search engines handle, and not bad. Small can still mean a great business. And maybe Hunch will really take off. But search is more than making decisions as Hunch can handle. So a general purpose search engine — Google and its alternatives, will still have bigger play.

The same is true of the recently-launched Wolfram Alpha search engine, what I called a “fact engine.” It’s mainly useful for particular types of queries, and it’s unlikely to attract a mass audience. But that doesn’t mean it’s not a great service to have

There’s also the help engines, Twitter and Aardvark, which people can tap into for advice. Twitter also does double-duty as “real-time search,” an unique repository of data where you can find out what’s happening on many things within seconds of it happening. That’s a compelling feature that attracts many people. And yet, it doesn’t replace regular search.

And Even Incremental Is Exciting!

Microsoft aspires for Bing to be more than a niche search engine. That’s why positioning it as a “decision engine” doesn’t resonate with me. Bing is that Swiss Army knife, that universal tool — it lets you search the web or make use of one of its many specialized search tools ranging from local search to video search.

While I might not agree with the marketing, I’m thrilled that Microsoft is experimenting with new things, even if they aren’t radical changes. I’m happy Bing’s out there an alternative to Google. And I hope those who try it don’t measure it against the hype that Microsoft itself has helped build. Use it — use Yahoo too, for that matter — occasionally. Instead of trying to refine a search at Google, try dumping the same exact query into Bing. You might be surprised to discover it gets the answer for you through its own unique view of the web. Think of Bing as a Google alternative, rather than a Google killer, and you’ll have the right expectations. For some, Bing might even win them over as a primary search engine.

To conclude, I said at the start that Bing wasn’t major immediate challenge to Google. That’s in terms of Google-killer hype, right now. This month, this year, it won’t bring droves over from Google. Even over time, it faces hurdles I’ve mentioned above plus Google’s serious lead in personalization of results. But overall, absolutely, Bing is a Google challenger, one that’s already keeping Google on its toes.

Postscript: Bartz again is talking on how Yahoo “is not a search company,” and I remembered now another reason why this is annoying me so much. Because I’ve heard it before from Yahoo, back in 2004, when Yahoo was positioned as “life engine” (better than a Bing decision engine, I guess) and “more than a search engine.”

I wrote at the time how disappointing the move was, in a piece called “Return To The Sad Days Of More Than A Search Engine?,” where I wrote in part:

Wow. How the circle turns. After all the recent attention on search — and the improvement in search quality that has come with it — can it be that the major search players are about to make the same portal mistakes of the late 1990s?

Those portal mistakes, a desire to be more than a search engine, allowed “pure search” Google to blossom. The difference is that this time, Google itself may be making the same mistakes.

Dunaway’s quote is so striking because it flashes back to around 1998, when all the major portals were almost embarrassed to be called search engines. You constantly heard from them that they were more than a search engine or that search was just one of many things they did….

Nevertheless, this inattention on search also caused the search engines — ahem, portals — to take their eye off the search ball. Into that space came Google. Its founders have previously said how they had no real interest in joining up with any of the established portals, as it was clear those companies weren’t focused on search.

The result is well-known. Google quickly grew in popularity, to the point where it has been seen by some as synonymous with search. In the meantime, paid listings pioneered by Overture, then used also by Google, meant search could earn big money. Suddenly, we were plunged into a new search engine war where Yahoo and Microsoft — two major winners of the portal wars — wanted to take on Google….

“More than a search engine.” It’s almost unbelievable to hear those words spoken, especially from Yahoo, which over the past year has been desperately trying to resurrect its image as a search engine. While I’ve yet to hear Google utter those exact words, its actions speak them loudly.

I’ve generally seen it unlikely that we’ll get a “new” Google in the near future, because it hasn’t seemed like the major players (Google included) would make portal mistakes again and neglect search. But the events of the past few weeks make me wonder anew.

Maybe the established companies will be able to juggle all the balls in the air — portal features, search, media sales — without dropping any of them. If not, perhaps the circle is about to turn again and a new Google really will emerge.

Since 2004, being “more than a search engine” covers an era where Yahoo’s search share plunged. I still think it’s a terrible signal to send. There’s a difference between “more than search” versus “search and more.” Be the “search and more” company, Yahoo, if you want to still be taken seriously in search.

Related Topics: Channel: Industry | Features: Analysis | Google: General | Google: Web Search | Microsoft: Bing | Microsoft: Marketing | Top News | Yahoo: General | Yahoo: Search


About The Author: is a Founding Editor of Search Engine Land. He’s a widely cited authority on search engines and search marketing issues who has covered the space since 1996. Danny also serves as Chief Content Officer for Third Door Media, which publishes Search Engine Land and produces the SMX: Search Marketing Expo conference series. He has a personal blog called Daggle (and keeps his disclosures page there). He can be found on Facebook, Google + and microblogs on Twitter as @dannysullivan.

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  • Devon Thomas Treadwell

    Outstanding analysis, Danny. Thank you for that.

    From a branding perspective, Google has the home turf advantage in search. When it comes down to a single word that each company owns in the mind of the audience, Google means “search” and Microsoft means “software,” in particular Windows. It’s almost impossible to dislodge strongly held positionings like these.

    Google has an uphill battle trying to make its brand mean more than search. Sure, people know about all the other products and services Google has become involved in, but because the company is now so diverse, nobody quite knows what other word captures the brand.

    Microsoft has the same problem. “Search” will never be the word that comes to the collective mind of the mass audience when they think of Microsoft.

    So, as a brand, Microsoft can forget about competing in a meaningful way with Google, or Yahoo for that matter. They ought to distance the Microsoft brand from Bing and just market it as a niche product. Instead of saddling it with all the brand baggage of Microsoft, let it be its own small brand that competes on the merits of its product advantages, a la Hunch.

    But I suppose it’s hard for a 500-lb gorilla to think that way.

    By the way, you might be interested in the short blog post I wrote on “Bing” as a brand name:

  • planetanand

    I guess it will really take some efforts to overtake Google, Yes i certainly agree that Google will be Google for the next 2-3 Years, but Since Microsoft is a big Brand people will take notice of it – they would be doing PR for this in a big way and if it proves what is said about than Google would have to sit on the edge and await for the results and innovate itself. Yahoo is totally out of context as of now…

    Anand Krushnan – Director – Direct Marketing ( – Performance Based SEO)

  • andyhugh

    Nice post Danny

    I can still remember the first time I did a search using this Google thing I was told about. It was like someone had turned open a light and I thought this was what search was meant to be. Sorry to hear that Bing will not give me the same feeling. Time will tell how well Bing actually is.


  • ericmeyerson

    Great post.

    In fairness to jerry yang, he wasn’t ridiculed for failing to use the word “boatloads” (or another euphemism for “a lot of money”) when he said he was still open to a MSFT deal. He was ridiculed because when he was still open the deal, YHOO’s stock price was down 60% from Ballmer’s last offer. YHOO’s stock had been inflated substantially because of rumors of a deal. MSFT offered a substantial premium even on that, and yang basically sabotaged the deal. (“Botched” the deal would imply that he was interested in it completing.) Given what’s happened to YHOO’s stock price since then, Ballmer really should send a “thank you” note to yang, who has saved MSFT billions in write-downs.

    The fact remains that YHOO and MSFT, while not market leaders, are great brands with good and popular products. During a recessionary period, when startups are not getting funded, they should have an easier time hiring executives and managers who need to pay the mortgage.

    Anyway, I enjoyed this post. Now I’m going to give Bing a spin.

  • Gil Reich

    Great post Danny. Y! and MSFT can’t stand the idea of being #2 in the world’s most lucrative space, so they’re positioning themselves ridiculously.

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