How Google Could Keep Yahoo From Microsoft
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Google could help keep Yahoo away from Microsoft if it took over selling search ads for Yahoo in return for a very large check. That money could help finance all sorts of possible deals.
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Microsoft&#39;s $44.6 billion offer to purchase Yahoo&#160;is a dramatic statement from a company that delayed acknowledging the importance of emerging Web business models for so long, it faced becoming an also-ran in the Web 2.0 economy.But the cultural implications of the move are so tricky that the deal could end up backfiring for both vendors if Microsoft doesn&#39;t take care to learn from its past and use Yahoo to transform its business and&#160;not just help bolster its unproven efforts in online advertising and hosted services.The unprecedented deal, which would put a sizable dent in Microsoft&#39;s wallet, would be the largest purchase ever for the company. If Microsoft is willing to spend that much money, it also has to be willing to change some old ways of thinking to make the most out of the investment, analysts say.To achieve this, analysts caution Microsoft to be careful not to view Yahoo as a one-trick pony, taken onboard only for its user base and infrastructure to bolster Microsoft&#39;s online advertising interests against Google. While this is certainly the primary reason for the deal, to make the most of it, Microsoft has to not only respect the strength of Yahoo&#39;s brand but also be willing to let go of some of its own traditional proprietary interests -- not just on the product side but in its culture as well.Microsoft has never been one to let go of its vision or proprietary interests too easily; when acquiring companies, it usually subsumes the products and services and brands them as its own.While this has worked in the past because Microsoft traditionally has shied away from acquiring big-name or big-ticket items --&#160;last year&#39;s $6 billion aQuantive deal&#160;was a notable exception -- it&#39;s not as simple to do this with a company like Yahoo, analysts said.In the areas of online search and particular services and as an online destination for users, Yahoo is a stronger brand than Microsoft. Microsoft must recognize this and be willing to give up some of its interest in new content and services branded, respectively, under MSN and Windows Live to make the deal successful, said Ned May, director and lead analyst for market research firm Outsell.&quot;The big question is, will Microsoft take this and recognize it for being a stronger property and migrate its efforts there, or will it try to push its own efforts out through Yahoo?&quot; he asked. &quot;Historically, there&#39;s no precedent for it to do anything but use [an acquired company] to get Microsoft&#39;s message out.&quot;Though Microsoft and Yahoo are different types of companies and the union itself makes much more sense, Ron Schmelzer, analyst and managing partner with Zapthink, likened the deal to Time Warner-AOL, in which AOL&#39;s brand was damaged, not enhanced, after all was said and done.But investing as much as the gross domestic product of some countries in one company could inspire Microsoft to &quot;change its stripes&quot; and rethink its own interests, he said.To make the deal a true success, Microsoft also has to prove that it can let go of its entrenched Windows OS and desktop software culture, which had been the anchor keeping Microsoft from moving more quickly against Google and Yahoo in online advertising and services in the first place, Schmelzer said.&quot;The application itself is moving away from the thing that sits captive on your desktop to the thing that&#39;s distributed on the Internet,&quot; he said. &quot;Microsoft has to rid itself of its &#39;80s and &#39;90s perspective -- which was great in the &#39;80s and &#39;90s, but now 80 percent of the value of the computer is not in the computer itself.&quot;Microsoft had been moving in this direction before Friday&#39;s news, but it has been burdened by its need to keep the customers of two of its biggest consumer products -- Windows and Office -- happy, as well as its enormous portfolio of enterprise and business customers. Instead of moving full bore into the Web, Microsoft had adopted a &quot;software plus services&quot; strategy as a nod to its software legacy and inability to move fully to a more services-oriented strategy because of it.Still, some think an entire cultural shift isn&#39;t necessary for Microsoft to make the most out of the deal. David Mitchell Smith, vice president and fellow at Gartner, said Microsoft can leverage Yahoo successfully without changing its usual way of doing things, by keeping the brand and merging the best parts of Yahoo&#39;s Internet business, such as its online content, advertising and search, with its online services efforts.&quot;I would expect to see the Yahoo brand come out of this very, very strong,&quot; he said. In particular, Microsoft has been making moves to drive more video and other multimedia content online through MSN, and that is one area where the company could give up its own identity in favor of Yahoo&#39;s, Smith said.Andrew Brust, chief, new technology for consulting firm twentysix New York, said that the combination of Microsoft&#39;s existing Web technology and the Yahoo brand would be &quot;nicely complementary,&quot; though he acknowledged the risks of such a union. Even so, &quot;risk aversion is not a good Internet strategy,&quot; Brust said. Taking a risk in this area as well as bringing &quot;some truly Internet-focused mindset into the corporate culture&quot; may be just what Microsoft needs.Others likened the deal to another risky one, HP-Compaq, which many feared would be a disaster because of product overlap and cultural differences. That deal eventually proved successful.However, it&#39;s important to keep in mind how much more of a role that culture and the cool factor plays on the Internet than it does in the world of traditional computer hardware, warned Outsell&#39;s May. He said Yahoo users may be put off by the notion of Microsoft as their new daddy and see Google as the lesser of two evils, which would defeat the notion of the Microsoft-Yahoo union in the first place.
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Google Inc  fired back on Sunday at Microsoft Corp's  $44.6 billion bid to acquire Yahoo Inc , accusing Microsoft of seeking to extend its computer software monopoly deeper into the Internet realm.
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Yahoo Inc  would  consider a business alliance with Google Inc  as one  way to rebuff a $44.6 billion takeover proposal by Microsoft, a  source familiar with Yahoo's strategy said on Sunday.
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Google will not be receiving any help from Yahoo in the case brought against it by the Author's Guild. Yahoo called Google's subpoena an attempt to force it to divulge trade secrets, and has refused to testify.
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Yahoo, owner of the most-visited U.S. Web site, will make cutbacks in some areas of its business as it faces increasing competition from Google and Microsoft.
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If the massive deal does go through, Google will at last face a major threat to fend off. Technical integration between Microsoft and Yahoo could be a nightmare, according to some analysts. Yet customers might stand to gain.
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Yahoo's fiercest competitor, Google, has raised concerns about the possibility of Microsoft's takeover. Google's motives, of course, are hardly pure.
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Google Inc. raised the specter of Microsoft Corp. using its proposed $42 billion acquisition of Yahoo Inc. to gain illegal control over the Internet, underscoring the online search leader's queasiness about its two biggest rivals teaming up.
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Google has made its first official comments on&#160;Microsoft&#39;s proposed acquisition of Yahoo&#160;saying that the deal raises &quot;troubling questions&quot; and that the underlying principles of the Internet stand to be tested by the proposed deal.
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Yahoo Inc. is more than doubling its limits on free e-mail storage in its latest move to combat two of its biggest rivals, Google Inc. and Microsoft Corp.
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Microsoft Corp plans to invest heavily  in Web search to compete against Google Inc, even if it fails  to acquire Yahoo Inc, the company's chairman Bill Gates said on  Monday.
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A smooth integration between Microsoft and Yahoo will not be a matter of simply swapping one set of software or hardware for another. It may hinge on changing deep-seated mind-sets.
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You can be sure that Microsoft will use the antitrust arguments it made against Google's recent deal for Doubleclick again to claim that it simply had no choice but to shell out $44.6 billion for Yahoo.
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(InfoWorld) - What if there were a giant database that contained your hidden insecurities, embarrassing medical questions, and the fact that you still think from time to time about your high-school girlfriend? Well, such a data store does exist -- if you've ever plugged such private topics into a search engine. The fact is, search engines like Google, Yahoo, and Microsoft Live Search all record and retain in their vast data banks any term that you query in addition to the date and time your query was processed, the IP address of your computer, and a cookie-based unique ID that -- unless you delete it -- enables the search engine to continue to know if requests are coming from that particular computer, even if the connection changes. Microsoft Live Search also records the type of search you conducted (image, Web, local, etc.), while Google additionally stores your browser type and language. And when you click on a link displayed on Google, that may also be recorded and associated with your computer's IP address. While Google recently announced that it would make its search logs anonymous after 18 months' time by deleting part of the IP address and obfuscating cookies associated with search queries, Microsoft and Yahoo haven't yet made their retention policies public. AOL stores this data for just one month. The upshot: If someone were to ask one of these search engine companies to produce a list of IP addresses or cookie values that searched on a particular search term, they conceivably could. Or, conversely, given an IP address or cookie value, the search engine firm could produce a list of terms searched by the user of that address or cookie value. Don't worry; be happy Some people say there's not much to worry about because the server logs don't associate these search terms with personally identifiable information, such as your name or e-mail address. However, if you have an account with or have registered for any of the additional services on a search engine site -- e-mail, social networks, calendars, shopping lists -- it's feasible that that connection could be made, says Brad Templeton, chairman of the board at the Electronic Frontier Foundation, a group that protects liberties and privacy in cyberspace. In the case of Microsoft and Yahoo, that information can be extensive because of how much personal information these search engine firms ask for on their account registration forms, including your occupation, job title and marital status, and the number of children in your household. According to Whitney Burk, public relations manager at Microsoft, "There is no systematic way of identifying, isolating, or cross-referencing search data with personally identifiable information." Google also says it stores the two types of information separately. However, according to Templeton, "it would be very difficult to make it impossible for someone to make that correlation." Templeton emphasizes that he doesn't know exactly how any of the search engine systems are designed, but -- given typical designs -- there are many different ways that someone with the right access and knowledge could make a retroactive correlation between search terms and personally identifiable information. Considering that search terms can reveal personal information that ranges from medical prescriptions to religious beliefs and political preferences, that's not an association many of us would be happy to see. Even if you didn't provide any personal information, an IP address alone could be traced back through a reverse DNS lookup to the Internet service provider and city of the IP address, according to Danny Sullivan, editor in chief of Search Engine Land, a blog dedicated to search news. Contacting the ISP could result in a positive identification of the account holder by finding out which account accessed the search engine at the time recorded in the search log. Last year, reporters at The New York Times didn't even need an IP address to track down the identity of an AOL user when AOL published anonymous search logs of 500,000 users over a three-month period. The identification was made possible simply based on the specificity of the search terms the user queried, such as real estate searches in the small town where she lived. (If you have any question as to what collected search terms reveal about an individual -- accurate or not -- check out those AOL search logs.) Hello, George Orwell? If all this sounds Big Brother-ish to you, you're not alone. Individual users, consumer interest groups, government regulatory committees around the world, and privacy groups are growing increasingly worried about how much personal data search engine firms retain and what they could do -- or be forced to do -- with this information. In recent months, Google seemingly hasn't been able to make a move without drawing speculation and suspicion about its ability to construct personal portraits of user behavior. Several consumer interest groups have filed a complaint with the Federal Trade Commission regarding Google's acquisition of DoubleClick. The groups claim it would give Google unprecedented insight into consumer behavior because it could track both people's Internet searches and their Web site visits. And when Google released its History feature, which associates individuals' search and page visitation histories with their account information, some observers, such as veteran blogger Anil Dash, called it both "brilliant" and "scary." "With the release of Web History, especially in the context of its recent acquisitions and announcements, Google may have crossed the line where regular users start to react with skepticism and caution instead of unabashed enthusiasm," Dash says in his blog (see "Google hostile to privacy, group says"). The creepiness factor surrounding online search data was also upped by the revelation in early 2006 that the U.S. Justice Department had subpoenaed Google, Yahoo, Microsoft, and AOL to turn over a random list of Web queries conducted over the course of a week, divorced from the names of those submitting them. AOL, Microsoft, and Yahoo turned over some of the requested information, but Google resisted. Although Google set a good precedent by doing so, "Governments can and will do things that companies have to comply with," says Chris Sherman, executive editor of Search Engine Land, referring to the Chinese government pressuring Yahoo to turn over the name of a user who posted to an online forum. "The [U.S.] government is a growing concern because over the last several, years it's been expanding its power to ask for such information, especially as the political climate has changed," Templeton says. For instance, he points out, warrants have been easier to get since the USA Patriot Act was enacted. "It's something we should worry about more than in the past," he says. Of course, some in the government are trying for more, not less, protection for online data. Congressman Edward Markey (D-Mass.) introduced a bill in early 2006 (H.R. 4731) to require owners of Internet Web sites -- not just search engine firms --- to destroy obsolete data containing personal consumer information. Putting aside the government, there are other ways for private data to be revealed, Templeton says, in the form of internal employees. "Everyone knows the history of most large database [breaches] comes down to a story of corrupt employees who sell access to private records," he says. "In the private investigation world, they can use bribes to get people's tax returns." Brass tacks All of this raises the question: Why do search firms store all this data? Google offers three reasons: It can help the company improve its services, maintain security and prevent abuse by looking for patterns indicating fraudulent activity, and comply with legal obligations to retain data. The company asserts that it can use this information to determine how often users are satisfied with the first result of a query and how often they proceed to later results. Or it can determine how many times an advertisement is clicked in order to calculate how much the advertiser should be charged. In his blog, Sullivan is more direct. "Google is big on personalization," he writes. "Big, big, big. For Google, getting up close and personal with individuals is seen as a big leap forward on many fronts -- and 2007 is the year Google is going all out after it." The more Google can know about you, Sullivan explains, the more it believes it can deliver you a better experience, not to mention more targeted ads. "But in particular," he says, "personalization is seen as the next generational step in delivering better search results." But Templeton questions whether the search firms need to store as much information as they do and for as long as they do. "We regularly advise [Google] that they're keeping too much information," he says. While some people, such as Sullivan, applaud Google's move to limit the amount of time it retains search logs, saying that will make it nearly impossible to trace any query back to a particular computer, Templeton thinks total destruction of the data would be far better. "History is full of [incidents] where people thought they could anonymize or destroy data, but people find a way to recover it," he says. "You have to be more thorough in their destruction -- you have to eventually destroy the connection between the IP address and the searches." Plus, Google's move may or may not address backup data, which Sullivan notes is not as easily accessible or altered. And the 18-month window also doesn't address data stored via its Web History feature. That information, Sullivan says, is not being destroyed or anonymized over time. "If you want it wiped out," he says on his blog, "Google says you have to do that separately." On the positive side, Web History lets users know exactly what data pertaining to them is stored, and they can take it into their own hands to delete those histories at any time. The same is true of Yahoo's MyWeb feature, which stores user searches if it's been switched on. With all the focus on user privacy, the search engine firms say they are taking measures to increase the anonymity of users. Google has said it will build privacy protections into its nonsearch products, including Google Talk's "off the record" feature, as well as Google Desktop's "pause" and "lock search" controls. It has also said it will provide easy-to-understand privacy policies for users on its Web site. For its part, Microsoft says it's actively engaged with data protection authorities around the world on what user information is collected and for what purposes as well as policies around notice and consent. "There is no universal consensus on the 'right' policies," Burk says. "However, we will continue to be active with privacy advocates and authorities as these decisions are made." In the end, Sherman says, it's up to individual users to decide whether they trust search engine firms with their personal information. "It's something everyone has to decide -- at what level am I comfortable with the reality of improving my search results vs. my identity being connected with the types of queries I do?" he says. And he's careful to note that the question extends way beyond Google, which in his eyes takes strong measures to secure user data. "When you go to Google, you can't get anywhere near their data centers," he says. "There are levels of security in the company where few people are cleared to get into areas where people can see personally identifiable information." But to Templeton, that's not enough. "Even when people try to do a good job, things happen, and data still gets out," he says. "If it's collected and in a place that can be accessed, it can get out." Furthermore, Sherman points out, it's not just search engines that store personal data. "Your ISP knows more about you than any search engine -- not just what you're searching on but every Web site you've visited," he says. On his blog Sullivan adds, "Google may be anonymizing its records, but your ISP might not be."
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A Microsoft-Yahoo merger could threaten the openness on which the Internet is based, a Google executive says.
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Google Inc. has made its name on advanced-search technology, but a company that launched Thursday with what could prove to be a better idea is poised to be a potential headache for Google as it battles against Yahoo Inc.