Software maker Microsoft asked search engine operator Yahoo to re-enter formal negotiations for an acquisition that could be worth USD 50 billion, the New York Post reported on Friday. Microsoft is feeling increasing pressure to compete with Google, which plans to beef up its portfolio with a USD 3.1 billion buy of online advertising company DoubleClick. Earlier this week, Yahoo said it would buy 80 percent of advertising exchange Right Media for USD 680 million, increasing its stake in that company to full control. Microsoft currently trails both Yahoo and Google in the lucrative and growing business of Web search. Update:. The deal's off.
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Member since:2006-05-18
Member since:2005-07-08
Oligopoly aint the best form of market.
Some years ago, I would have agreed, but the more I learn about our bastardization of the free market, the more I have come to appreciate the effectiveness of two- and three-way battles in encouraging innovation and creating value for the consumer. Allowing a single entity to control a market is extremely unproductive, but allowing mature markets to consolidate into a duopoly ultimately seems to work in our favor.
We see this happen in even the most idealistic of markets, for instance in the free software ecosystem. How often do we see two projects rise to dominance and evolve in parallel despite unusually high levels of market flexibility and elasticity? A duopoly is the best compromise between competition and standardization--and collaboration in free software.
Often people claim that barriers to entry scale with market consolidation, but I don't buy into this notion, especially in markets that are already somewhat consolidated. If this proposed acquisition goes through, will it raise the barriers to entry in the search market? Maybe a little, but this was already an incredibly hard nut to crack. Ask.com has some pretty neat technology, but they've been unable to make any significant dent. Most people won't take advantage of these features until they are bought out by one of the search giants... and I guarantee that they will be acquired eventually.
Not to sound like I belong on stage at last night's debate, but we have to pay an implicit price for true freedom. If we want search technology to move forward, we need to tolerate the natural market forces that result in consolidation. Unless a new player brings radically better technology to the market like Google did years ago with their entrance into a much less mature search market, the path to progress inevitable goes through Google and Microsoft... and possibly Yahoo.
Member since:
2005-08-18
Oligopoly aint the best form of market. Especially if market is knowladge and information (thats what search engines is about , imo).
It makes me wonder ... Usually it comes down to forming a cartel. And then you have no choice at all, because both sides are one.
And in this case, if we are left with ony google and microsoft, then it can get ugly ... really ugly. None of 'em has spotless record in offering free information.