Microsoft invites Twitter and Yahoo! to the dance. Will Google throw a jealous fit?
I spend a lot of time these days writing stories about how the media market is stalled – whether that be syndication, advertising or station sales — so it’s actually sort of nice to read stories about how Google or Microsoft or someone might acquire Twitter, or about how Microsoft-Yahoo! might be back on in some small way (even though I was incredibly sick of that story when it was actually happening). It’s just nice to know that someone out there is considering buying something. I don’t know if this market has bottomed out yet, but I do know that no movement is good for nobody.
Kara Swisher at AllThingsD advanced these two stories this week. First, as expected, Microsoft is in the hunt for Twitter. Whether Microsoft actually wants Twitter and/or whether it would have any idea what to do with the red-hot micro-blogging site are not the relevant questions. The truth is that Microsoft just can’t allow Google to gain any more advantage in search unless it wants to give up completely.
Thus far, Twitter’s founders seem less interested in selling and more interested in growing a viable business. Still, there’s this, according to Swisher: “When you are in a situation like Twitter is in, you have to wonder if this is the high-water mark and it is time to sell out or if you are underestimating yourself badly by even considering that,” said one Silicon Valley entrepreneur who has been in a similar spot in the past. “It can be very hard to think straight.”
In this economy, there are worse problems one could have. I personally know at least 25 unemployed people who would be happy to tell Biz and Evan all about it while simultaneously asking for a job.
Meanwhile, Microsoft is allegedly back at Yahoo!’s negotiating table, trying to work out a search and advertising partnership. Microsoft CEO Steve Ballmer has been pretty much telling that to anyone who will listen, while Bartz has been playing her cards closer to the vest, according to Swisher. OK, true, nobody’s talking about an acquisition, but the fact that these two are back at the table should strike MSFT and YHOO investors as good news.
Yahoo! might be particularly motivated to strike a deal with Microsoft, the number-three search engine player (behind Google and Yahoo!) because, according to Dow Jones, Microsoft and Google each just struck toolbar search engine deals with computer makers Hewlett-Packard (HPQ) and Acer, respectively. Those deals could cause Yahoo’s traffic to drop up to 15% over the next year and a half. That’s a heart-dropping phrase for anyone to hear and especially in this economy. (I’m really using that phrase a lot lately, but “this economy” seems to be at the heart of every conversation I have, no matter with whom.)
I personally think this Dow Jones story is a little overhyped, which the author actually addresses, because I don’t think packaging a particular search tool or browser with a computer means the buyer will actually use that tool. I sort of resent all the prepackaged crap that comes with any new laptop I buy because I’m just going to reload it with all my own preferred software. On the other hand, I suppose there are plenty of plug-and-play computer users out there who will just use what’s put in front of them, but I think people’s computing habits and software preferences are more set now than they once were.
The article makes a good point, though, that Yahoo! really needs to keep its search market share above 20% if it wants to reap the benefits of the search-based advertising market – now estimated at $10.5 billion, according to the Interactive Advertising Bureau. It’s that market that made Google rich.
Here’s my final thought, which is a bit of a right angle. While Google ponders new acquisitions, Is YouTube doomed? Click that link, ponder, and get back to me.