Archive for May, 2007

Google, Microsoft and Yahoo! do battle

May 21, 2007

The level of acquisition in the tech industry over the past few weeks is astonishing. Let’s recap:

Google has acquired DoubleClick for $3.1bn

News Corp (owners of MySpace) has acquired Photobucket for $250m

Microsoft has acquired aQuantive for $3bn

Rumoured (grain of salt required):

Both Microsoft and Google are after Facebook (value $1.6bn)

Google is after Feedburner (unknown value)

Google is after Salesforce (unknown value)

Yahoo is after Bebo for $1bn

So what does this mean for the average user? There’s a reasonable piece here, but my take on this is that it’s a very good thing for the consumer – so long as the competition remains hot.

Ignoring the ad related acquisitions for a moment, my experience of similar situations has been good. Blogger were acquired by Google and, not only did my Google username and password work, but a lot of investment on Google’s part means that site performance has improved and integration with Google Reader (so I can show my shared items on my blog page) is seamless. Just last week, Google proved the value of buying YouTube last year for $1.65bn with the introduction of their Universal SearchRobert Scoble explains the importance of this move very well. That’s good for the consumer too. And Yahoo have continued with incremental performance since they bought Flickr – they daren’t do anything too drastic. If it ain’t broke…?

In this day and age, there is little point spending this much money on an acquisition, only to make significant changes and marginalise your new customers. And you need to continue to innovate to stay ahead of the crowd – which means continued investment after purchase is practically guaranteed. Which is good for customers – so long as competition is still there. I doubt whether Microsoft or Google will run out of money any time soon, but I think it would be bad news for users if one of them were to buy Yahoo, for example. Unlikely? Maybe not.

Hopefully the bad old days of acquiring and killing the competition are dead and buried. The days of one company dominating the landscape are, hopefully, behind us. It’s a good time to be in this industry.

Footnote: Companies acquired by Microsoft, by Google and by Yahoo.