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Microsoft-Yahoo! Deal Not a Done Deal, But Microsoft Proceeds to Other Deals as Search Ambitions Fail

Digital world



Summary: Scrutiny and challenges ahead of "Microsoft 2.0"; Wolfram|Alpha and Advance Internet deals spotted

Regardless of the outcome of the Microsoft/Yahoo! deal, Yahoo! is now behaving like a drone of Microsoft [1, 2]. As Hadoop escapees show us, this also has negative effects on Free software inside Yahoo! [1, 2]. Based on this report, other Yahoo! 'refugees' are starting to form a business elsewhere.

A team of Yahoo veterans who built its behavioral targeting advertising technology are publicly launching a hybrid ad network today called Rocket Fuel, which they've tested over the past year with major brands including Nike, Dell, Microsoft, and American Express. Despite keeping quiet, Rocket Fuel's ad network reaches 40 million people and shows them about 100 million ads per month.


Great damage (e.g. to consumer choice) has already been done by the signing of the Microsoft/Yahoo! deal, which is revocable nonetheless. Antitrust regulators may still break it apart.

Yahoo Inc. and Microsoft Corp. hope that by joining forces, they can tilt the balance of power in Internet search away from Google Inc. First, however, Yahoo and Microsoft have to convince regulators that their plan won't hurt online advertisers and consumers.

As the U.S. Justice Department reviews the proposed partnership, approval figures to hinge on this question: Will the online ad market be healthier if Google's dominance is challenged by a single, more muscular rival instead of two scrawnier foes?


Microsoft too admits that this is not final. From Reuters:

Microsoft legal chief sees risk in Yahoo deal



[...]

The deal, struck in late July after months of talks, faces a tough regulatory review, and the possibility that it won't be enough to effectively challenge Google Inc (GOOG.O).


Reuters names some other challenges such as this one in India:

According to Komli Media’s analytics platform Vizisense, the combined share of search traffic from India for Yahoo and Microsoft in July is only 8.49%, compared with Google’s 91.19%. However, the combined reach of search users is higher, at 37.90%, compared with Google’s 93.17%.


In China, which is the largest Internet population, it's all about Baidu and Google. We wrote about this some weeks ago and also cited supportive numbers. Speaking of such numbers, the above shows sheer dominance by Google outside the United States (US) and not too surprisingly, the Microsoft-friendly meters that Microsoft loves to reference and pay [1, 2, 3] are not measuring things globally. Classic hype and deception for Bing. Among GNU/Linux users (many of whom are outside the US), it's mostly the same story:

It's therefore somewhat telling that Linux users overwhelmingly choose Google as their preferred search engine, according to data released today by Chitika, an online advertising network. Chitika analyzed data from 163 million searches across its advertising network between July 30 and August 16, and came up with the following...


According to this, almost 95% of GNU/Linux users are also using Google (neither Yahoo! nor Microsoft's search engine identity du jour).

What can Microsoft do for a breakthrough? According to some reports, Wolfram|Alpha negotiated an agreement with Microsoft, but it's not quite what CNET tries to make it seem.

Wolfram Alpha and Bing have reached a licensing deal that allows Bing to present some of the specialized scientific and computational content that Wolfram Alpha generates, according to a source familiar with the deal. The deal was reported earlier by TechCrunch.


It would be better for Wolfram|Alpha not to associate itself with a company so hostile towards science, a company that thrives in ignorance.

Microsoft has signed another deal with Advance Internet, a newspaper group. It will have a negative effect on balance in the news.

Microsoft makes another move to restart its internet business with the announcement of a local advertising partnership with a major newspaper group in the US


Several days ago we saw Microsoft/NBC buying another news Web site [1, 2], which means it will be less than eager to criticise Microsoft, the paymaster.

A writer at Seeking Alpha has more details on what should be announced tomorrow.

On Monday, Advance Internet is announcing its new partnership with Microsoft (MSFT), an agreement that tells us a few things about the emerging, post-recession marketplace.


What will be the effect on newspaper coverage now that Microsoft is working with them? It would be naïve to assume that that the answer is "none".

"And let's face facts. innovation has never been Microsoft's strong suite. We're much better at ripping off our competitors. For example, we did not invent either ASP or IE, we bought them!"

--E-mail from an unidentified Microsoft employee, as revealed in the antitrust trial

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