Microsoft’s bid to buy Yahoo at a 62% premium on Friday caused quite a stir in the media world, but is it too little too late? As of August 2007. Nielson ranked the top search engines with Google holding a 53% market share, followed by Yahoo with 19.9% and Microsoft with 12.9%. Since it initially launched its search engine, Google had consistently gained market share in each and every measuring period while Yahoo has seen its share atrophy steadily over that same time. Google is now seen as the leader in not only search, but innovation. Google is also very bold. Its acquisition of YouTube last year is testament to that fact.
Feeling the heat from getting caught with their pants down in search, the ever-conservative leadership at Microsoft sees this bid as a bold move but is it? Had Microsoft made a play for Yahoo in 2002, maybe it would be seen as bold. But, until Google revolutionized the monetization of search, nobody thought that a search engine was worth much and instead, Microsoft focused on their browser and that was a big mistake. Who knows how this will play out. One thing is clear and that is Competition is good for all industries and a bigger, better funded competitor for Google will be good for consumers as these giants duke it out.