Thursday, February 28, 2008

Google winner as Microsoft and Yahoo face off

Neither Microsoft Corp nor Yahoo Inc wants to blink first in the software giant's proposed $41.7 billion takeover of the Web pioneer but as the gamesmanship drags on, archrival Google Inc, the merger's raison d'etre, is the biggest beneficiary.
Not much has progressed since Microsoft offered to buy Yahoo on Feb 1, a proposal rebuffed by Yahoo's board as undervaluing the company. Microsoft has countered by saying its offer was fair and urged the board to take a second look.The union of its two biggest Web rivals could eventually loosen Google's grip on online search and advertising, but a messy takeover battle followed by a complicated integration could give Google ample time to build on its advantage.
"Google benefits if Yahoo is in a state of limbo," said RBC Capital analyst Jordan Rohan. "The longer the uncertainty persists, the greater lead Google has in online advertising."Microsoft has not ruled out a proxy fight to win Yahoo, and the latter continues to probe for other options.
A proxy fight could stretch until July, the latest it could hold its annual meeting this year, followed by a strict regulatory review process in the US and Europe.
Already, Microsoft is seeking to absorb its $6 billion purchase of advertising services company aQuantive from mid-2007.

Google dominance
Google has proven what it can do when given an opportunity to build on a lead.
Over the last year, Google's US Web search market share has jumped 11 per cent points, while Yahoo and Microsoft have both posted steady declines, according to research firm comScore. Factor in Web searches done overseas and Google's lead is daunting -- with three-quarters of the world market.

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