So why do I say I’m afraid that Yahoo will join Google’s Ad platform? Simple. That step would give Google a near-total monopoly over the search market. That’s not good for publishers and for the advertisers. It might even be dangerous since Google’s Adwords will then be the only place to go for search engine advertising. Given the fact that the pricing of Adwords is based on an auction-model, I think Google is the only party who will benefit. But, apart from the danger for the online advertising industry, this step would make Yahoo extremely dependent on Google.

Microsoft’s response to the Yahoo/Google deal is a quite logical one:

“Any definitive agreement between Yahoo! and Google would consolidate over 90% of the search advertising market in Google’s hands. This would make the market far less competitive, in sharp contrast to our own proposal to acquire Yahoo! We will assess closely all of our options. Our proposal remains the only alternative put forward that offers Yahoo! shareholders full and fair value for their shares, gives every shareholder a vote on the future of the company, and enhances choice for content creators, advertisers, and consumers.”

It’s clearly bothering Microsoft that they are still such a tiny player in the web search business. Despite the huge investments they made in search technology in the last few years, their US marketshare has decreased from 16.3% in 2005 to 11.2% by August 2007. That’s not very promising. In my opinion they seriously screwed up by renaming all of their online services to ’something’ Live. Their branding strategy is a mess, and now they want to add Yahoo! to their portfolio as well. I think the Yahoo management understands that a merge with Microsoft would kill the company culture, but, it might be difficult to explain that to the shareholders who will receive $$$ when MS acquires Yahoo.

It’s a tough one, but I would definitely stay away from both Google and Microsoft. A merge with AOL or News Corp. might be an interesting alternative. To be continued (I guess)…

Personally I expected Google to buy Navteq. For the last couple of months, Google has made clear that they expect a lot of their mapping service (maps.google.com). I can’t imagine that they like the idea of being dependent on nokia. However, another company will even have a worse feeling about this acquisition: Garmin. Garmin currently gets their data from Navteq, that however means that they are now a customer of a big competitor (nokia). Switching to Tele Atlas isn’t much better since that company is owned by another competitor, TomTom. That leaves them in a difficult situation.

For the customers however, this is only good news. I expect nokia to enter the navigation-market with some very interesting products. Given nokia’s background, an internet-connected navigation device cannot be far away.

This is immediatly the biggest acquisition of Google (almost twice as much as they paid for YouTube). What could be the reason? I quote from the Google Blog:

This new partnership represents a tremendous opportunity for us at Google to broaden and deepen our inventory of available ads and to better serve both our publishers and users. Together, Google and DoubleClick will empower agencies, advertisers, and publishers to collaborate more efficiently and effectively, which will, in turn, provide a better experience for our users.

Personally, I think the acquistion mainly comes from a strategic point of view. Google must have been really frightened that Microsoft would gain a big marketshare by buying DoubleClick (they obviously outbidded MS).

I wonder how this will influence the current adsense / adwords platform. Google will now also have access to DoubleClicks customers, will we see higher or lower CPC’s?

This is definitively the biggest and probably the most important acquirement in the (young) history of Google. It is now Googles turn to show how they will make YouTube profitable.
See Google’s press releases here or here.

The press release has been taken offline by Google, but here is a mirror:

Google To Acquire YouTube for $1.65 Billion in Stock

Combination Will Create New Opportunities for Users and Content Owners Everywhere

MOUNTAIN VIEW, Calif., October 9, 2006 – Google Inc. (NASDAQ: GOOG) announced today that it has agreed to acquire YouTube, the consumer media company for people to watch and share original videos through a Web experience, for $1.65 billion in a stock-for-stock transaction. Following the acquisition, YouTube will operate independently to preserve its successful brand and passionate community.

The acquisition combines one of the largest and fastest growing online video entertainment communities with Google’s expertise in organizing information and creating new models for advertising on the Internet. The combined companies will focus on providing a better, more comprehensive experience for users interested in uploading, watching and sharing videos, and will offer new opportunities for professional content owners to distribute their work to reach a vast new audience.

“The YouTube team has built an exciting and powerful media platform that complements Google’s mission to organize the world’s information and make it universally accessible and useful,â€? said Eric Schmidt, Chief Executive Officer of Google. “Our companies share similar values; we both always put our users first and are committed to innovating to improve their experience. Together, we are natural partners to offer a compelling media entertainment service to users, content owners and advertisers.â€?

“Our community has played a vital role in changing the way that people consume media, creating a new clip culture. By joining forces with Google, we can benefit from its global reach and technology leadership to deliver a more comprehensive entertainment experience for our users and to create new opportunities for our partners,� said Chad Hurley, CEO and Co-Founder of YouTube. “I’m confident that with this partnership we’ll have the flexibility and resources needed to pursue our goal of building the next-generation platform for serving media worldwide.�

When the acquisition is complete, YouTube will retain its distinct brand identity, strengthening and complementing Google’s own fast-growing video business. YouTube will continue to be based in San Bruno, CA, and all YouTube employees will remain with the company. With Google’s technology, advertiser relationships and global reach, YouTube will continue to build on its success as one of the world’s most popular services for video entertainment.

The number of Google shares to be issued in the transaction will be determined based on the 30-day average closing price two trading days prior to the completion of the acquisition. Both companies have approved the transaction, which is subject to customary closing conditions and is expected to close in the fourth quarter of 2006.