Entrepreneur Watch

A Microsoft-Yahoo Merger Would Be a Boon For Google

Will Microsoft and Yahoo really merge one day? I've been thinking about that question since March.

There are a lot of advantages. Search Insider goes inside the Google annual 10K report to point out the dangers, as outlined by Google.

Either Microsoft or Yahoo could take share from Google if they "make their web search or advertiser services easier to access," according to the 10K. But that's a big if. A big part of the reason their products are hard to access is because they're confusing and bombed with too many ads.

Or, says Search Insider, their combined portals would be powerful traffic generators. Not likely. Portals are fading in importance to younger Web surfers. They're too annoying. Yahoo gets traffic mainly because people find it too hard to switch from Yahoo mail, and Microsoft gets most of its traffic by being the default home page on PCs.

But Google is making headway offering default services with PC makers such as Dell.

Also, Microsoft could make search an integrated part of Windows. That's exactly the kind of move that got Microsoft in trouble with the SEC and other governments. But it's possible now that Microsoft isn't the biggest bully on the block.

And let's not forget that Google is offering software services that compete with those from Microsoft and Yahoo. Still early, but that's the future of software.

What such a merger would really be after is a bigger advertising network. That could make them more competitive. But in a more balanced article, PC World points out the snag:  Merging the technologies of the two companies is harder than building a platypus from scratch.

Most mergers fail, and big mergers fare the worst. There would be enormous chaos if these two companies were to merge, and Google would gain ground while it happened.

And finally, volume is not everything in advertising. What you want is relevant ads. Yahoo and Microsoft don't yet seem to be able to wean themselves from the idea of pushing stupid and irrelevant ads on us because advertisers pay them a lot.

A merger would be a big upheaval, but I don't think it would be much of a threat. Only hard work and smart moves can beat Google.

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Google vs. Viacom -- huh?

The legal bickering between Google and Viacom over YouTube is a real mess.

Does Viacom really have a case? What confuses me is the arguing over the safe harbor provision of the Digital Millennium Copyright Act, which provides some protection for hosting sites.

Viacom says DMCA does not  apply to YouTube. “It is obvious that YouTube has knowledge of infringing material on their site, and they are profiting from it.”

But knowledge of the infringing material is not enough as long as the stuff is removed when informed by the copyright owners.

Google does that, and has said it will soon be offering more tools for copyright owners, called "Claim Your Content."

Regarding the financial benefit part, the web site ktlaw has a good summary of DMCA and notes this exception: "if the service provider ... receives a financial benefit directly attributable to the infringing activity, the service provider will not be protected"

But when this suit was filed, YouTube had no revenues! So how is it profiting?

Maybe Viacom just figures that there will be profits by the time the suit makes it to court. YouTube is supposed to be adding ads soon.

Lawrence Lessig, a brilliant opponent of overly-zealous copyright laws says Viacom is trying to avoid DMCA, a law passed by Congress, and instead get the courts to rule against Google on the basis of "the common law of copyright" established by a Supreme Court ruling against Grokster.

"Why burden Congress with the hassle of law making when you’ve got a Supreme Court eager to jump in and legislate?" says Lessig.

Then again, maybe this is just Viacom's way of striking a lucrative deal with Google to get a lot of money for the rights to use Viacom material.

According to the Financial Times: 'CEO Eric Schmidt has called Viacom's suit a "negotiating tactic." “The kinds of comments you’re referring to [criticising Google] are in the context of a business negotiation,” Mr Schmidt told investors at a Bear Stearns conference.

At least that makes sense.

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