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Google’s Search-Based Advertising Catches Attention of Microsoft (June 19th, 2008)

The name for Google was taken originally from the term “Googolplex” (a number that is equal to 1 followed by loads of zeros and expressed as ten to the tenth, hundredth power). Google, the company, is truly living up to its root name. Google, the business, means big numbers, big profits, and big competition. Google is THE Internet search engine to be reckoned with, generating large numbers from the advertising industry.



Google’s Search-Based Advertising Catches Attention of Microsoft
By: ConnectThru.com

The name for Google was taken originally from the term “Googolplex” (a number that is equal to 1 followed by loads of zeros and expressed as ten to the tenth, hundredth power). Google, the company, is truly living up to its root name. Google, the business, means big numbers, big profits, and big competition. Google is THE Internet search engine to be reckoned with, generating large numbers from the advertising industry.

Google offers many areas for individual users to utilize advertising space with Google’s AdWords and programs like AdSense. However, it is Google’s main, showcase advertising—the style and search-based advertising model— that has been the envy of all its competitors in the Search Advertising Market.

In February of this year, Microsoft made an unsolicited bid to purchase Yahoo! for $44.6 billion dollars, cash and stock. The Yahoo/Microsoft Merger is after more than search-based advertising. Microsoft has plans of using Yahoo to help bolster their place in all around online advertising. Still, Google is untouchable.

A part of Google’s advertising success can be credited to the advertising inadequacies in competitors such as Yahoo. During February 2008, Google distanced itself from all competitors in the U.S Search Market. According to the Washington Post, Yahoo's share slipped to 21.6 percent, from 22.2 percent a month earlier.

Google is a growing force against all search engines and search-based advertisers mainly because of its fan-base. Many users prefer Google due to the minimalistic approach to searching. The Google homepage is famous for this simple presentation. There is a search bar and a main GOOGLE header. That’s it. When Google’s search results are returned, they are organized in a clean, comprehensive layout. This is a sharp contrast to the overwhelming clutter on the Yahoo and MSN search pages. The choice of search engines seems just as simple.

Google is not concerned about any meager threat that Yahoo and Microsoft pose for its advertising revenue. However, Google is worried about the pressure that Microsoft and Yahoo place on the open nature of the Internet, where even small companies have a chance to be competitive. This merger will also compromise an on-line environment that fosters innovation through competition.

Drummond, Google’s Senior Vice President, Corporate Development and Chief Legal Officer, discusses Microsoft as encroaching on a monopoly. Drummond states: “While the Internet rewards competitive innovation, Microsoft has frequently sought to establish proprietary monopolies -- and then leverage its dominance into new, adjacent markets.” Microsoft has a reputation for conquering smaller companies. Microsoft is eyeing up Yahoo as something that they can incorporate in the Microsoft engine. Even though Yahoo may not be a small company, their size, use, and power is alluring to Microsoft as their combined efforts could create a challenge to Google.
However, could a merger between Microsoft and Yahoo even be successful in the first place? Many speculate nay. The infrastructure of Yahoo is massive. There are14,000 employees strong. Aside from that, the Yahoo users need to be considered. The ubiquity of Yahoo’s software and email accounts are even larger.

Among the many other conflicts brewing between the two businesses, the software is the biggest concern. Both companies use different data systems. According to New York Time’s reports, “Microsoft’s data centers run on proprietary software that is incompatible with the open-source programs and applications adopted by Yahoo!” As opposed to Microsoft, Yahoo has been actively building in open source format. Open source is a human-readable source code. The code is copyrighted, or licensed. Microsoft’s programs are coded with a different encryption than the technology used by Yahoo!

Many of the apprehensions to a Microsoft and Yahoo! connection stem from the problematic technology merger. Due to the difference in operating systems, a smooth assimilation process between of Microsoft and Yahoo! would be a similar version of chaos only likened to the Spring and Nextel fiasco during their combination in 2004. When these merges happen, is it fair to the loyal customers, or in this case subscribers? What will happen to the email accounts, especially since the compatibility between the companies is so disparate?

Still, the team at Google is keeping a vigilant eye on this possible merger, fearing violations of antitrust legislation, their main concern. Google’s advertising methodology and market space seems to be quite safe. Maybe less really is more, especially in the case of Google and its minimal approach to advertising design.



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