Two's company, Four IS a crowd


The popular saying, "two's company, three's a crowd", can be applied to many situations. But for the online environment, it looks as though the old adage should read, "two's company, FOUR's a crowd" instead.

You see, whilst Google and Facebook continue to dominate their markets, the likes of Yahoo and Microsoft Bing struggle to keep up. Just last month, Yahoo fired its Chief Executive, Carol Bartz, after an unsuccessful 18 months at the helm, and now, as the company stumbles as a result of decreasing advertising revenue and a diminishing market share, talk of a buy-out is becoming more of a hot-topic. Microsoft is also struggling to make the Bing search engine profitable, and there's little doubt that both are under pressure as a result of the two heavyweights, Google and Facebook, attracting more users and more advertising revenue.

Who'll buy Yahoo first?

Recent chit-chat has centred around a possible Microsoft buy-out of Yahoo, and this seemed logical as the move would strengthen Microsoft and give the company a search market share of around 30% in the US, which is a little more competitive, and could result in a serious challenge being mounted against the stronghold Google currently has over the industry.

But now, there is talk of a Google-backed takeover which would ensure that Microsoft wouldn't get control of the struggling media company. Were this to happen, Microsoft could be in serious trouble as it would be cut off from occupying a significant position within the desktop search market and becoming profitable would be unlikely, even in the medium-to-long term.

Google could attract regulatory interest

On the other side of the coin however, you have Google facing regulatory problems should they go through with a buy-out. Whilst there's no doubt that Google (which has approximately £30 billion in cash) could afford to buy Yahoo (currently valued at £20 billion), in doing so, the search giant would effectively own the industry through a monopoly and would go on to attract even more regulatory interest than it already does. There is a suggestion that Google would simply fund a buy-out through a 3rd party in order to avoid such investigations and attention, and this is reminiscent of the $150 million investment Microsoft made in its competitor, Apple Inc., back in 1997 in order to preserve competition in the computer market.

Whilst it remains to be seen what will happen to Yahoo (and Microsoft Bing thereafter), it does seem the World Wide Web only has enough space for two heavyweights at the moment.

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