I’ve been following the Microsoft-Google lovers tiff with some amusement. I am totally staggered by the amount of irony and hypocrisy flying about the place from the two companies. They’re acting like two spoilt kids who have had their cool toys surpassed by something bigger and better. The whole merger proposition with Yahoo has also lit up the blogosphere. Nothing like Microsoft making unsolicited bids on a rival to get people’s adrenalin levels pumping.

I am a big Google fan but I have to say here that Google is looking really bad with all this complaining. It’s so blatantly transparent that they have considered themselves the untouchable number one company on the internet, with their popular brand name and bottomless bank accounts. Out of all that have come some really amazing products but on the other hand, it has bred arrogance and complacency, the same way that Microsoft was in the 1990’s, after they had crushed Netscape and they were the dominant force on people’s PC’s. Ironically, it was Google who toppled Microsoft off their pedestal back then. Could history be about to finally come full circle with Microsoft exacting their revenge by knocking Google down a peg or two? Could we see that absurd Google stock price tumble just a bit?

Let’s face it, Google is not in a position to lecture anyone about monopolies. They seem to be trying to be all things to all people at the moment. They are indexing everything from books to selling trends. They are buying up smaller companies in a big buying frenzy, as if someone is about to come along and clean out Google’s bank accounts in the next day or two (”EVERYTHING MUST GO!!!“). So who’s creating the bigger monopoly here? Google or Microsoft? It’s hard to tell them apart these days.

But in my view, Microsoft isn’t squeaky clean in this ongoing drama. In response to Google’s complaints of another monopoly coming along, Microsoft retorts with “Google has amassed about 75 percent of paid search revenues worldwide and its share continues to grow“. In other words, “don’t lecture us about monopolies when you’re doing it yourselves”.   Fair enough.

But Microsoft seems to be overlooking the fact that Google gives users a choice which they could either accept or reject.  That’s how they have managed to amass 75% of paid search revenues.  Microsoft makes it sound as if there is a law which forces everyone to use Adwords.  No-one forces you to use Adwords.   Adwords is an excellent advertising platform and that’s why people have chosen to use it.  They take one look at Microsoft’s inferior  AdCenter and then decide Adwords is much better.

Let us also not forget that Microsoft built up their web browser monopoly by FORCING people to use the Windows operating system.   Plus they have been a bit Johnny-come-lately to the paid search game.  So I don’t think that it is a very fair statement to say “well Google has 75% of the search revenues so we can do whatever we want”. Google has got there by giving people a choice and being innovative. Microsoft on the other hand doesn’t believe in giving people a choice - they would much rather prefer to shove their products down people’s throats and stifle the competitors.

Then Microsoft comes out with that Redmond wants to buy Yahoo “merely to create a “compelling number two competitor” in search and online advertising“. Talk about Under-statement of the Year 2008! A “compelling number two competitor”? I think a combined Microsoft-Yahoo could potentially become number one and this is precisely why Google is getting their pants in a tangle over this whole episode. Think about it - Windows Vista, MS Office, Flickr, Delicious - all under one roof - and that’s just for starters.

Search Engine Journal speculates that the real reason why Google may be worried is because Microsoft will use their partnership with Yahoo to muscle their Office applications onto the web in direct competition to Google Docs. But what is wrong with some competition? If Google truly believes that their product is better then they should make more effort to spruce Google Docs up and convince us that it is the best. At the end of the day, users will decide which one is the better of the two - Google’s or Microsoft.

Google’s protests are baseless really. Search Engine Watch calculates a combined Microsoft / Yahoo merger to occupy 34.6% of the market while Google will maintain 61% of the market. So a Microsoft-Yahoo merger wouldn’t spell the beginning of the end for Google. It would just set up a powerful rival for the future and Google doesn’t want that.

Really, at the end of the day, the only people who will be really affected by a Microsoft-Yahoo takeover will be the shareholders - they will see a rise or drop in their shareprice. But for everyday internet users like you and me, we may start to see some innovative products come out of all three companies as the battle heats up for the loyalties of users.

But now it seems that the possibility is on the table for Yahoo to outsource some of their search to Google. If that deal goes through, will we hear howls of protest from Redmond?

You know what just popped into my head?   That the internet is so full of enormous egos.   When one company does something radical, the others complain.   Is Google’s real problem that they realise they were not quick enough to jump in there and buy Yahoo first?    Is it just wounded pride that’s the problem here?

Technorati Tags: acquisition, Google, merger, Microsoft, Yahoo

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