February 29, 2008 | Friday
Yahoo stock to be scooped up by…Google?
By Jackie Danicki - Blogger in News |Search Engines |Google |Yahoo |Microsoft
The latest rumour concerning Microsoft’s bid to buy Yahoo is that Google is thinking of nabbing almost 20 per cent of Yahoo’s stock for itself. That’s as good a place as any to start with a closer look at some of the more interesting acquisition-related news of the last two days.
First, the details on that delicious rumour:
Google clearly wants to see the status quo continue in the search space, and would rather fight a fragmented market than a single, stronger, Microsoft/Yahoo...Google also hired veteran M&A expert George Boutros as Credit Suisse the day after the Microsoft bid was made, to advise them on how to respond to the deal. That advice, one source says, may be leading Google to place an unsolicited bid to acquire just under 20% of Yahoo’s stock at an inflated price…
“It’s a relatively cheap way for Google to confuse the situation further, and, potentially delay or disrupt a Microsoft acquisition” said one advisor to the deal, requesting to remain anonymous.
Put that way, it doesn’t seem like such a crazy idea. But what usually motivates Google to make an acquisition? Philipp Lenssen, who writes the hyper-focused and exhaustively comprehensive Google Blogoscoped, has a detailed and well-reasoned post about why Google buys companies. According to Lenssen, there are four main things of which Google is hungry for more:
* Data. Like articles, meta data, digital archives, photographs.
* Users. Or in more general terms, customers or market share.
* Technology. Mostly, that’s software, like web or desktop applications.
* Developers. Or, in more general terms, call it employees.
Earlier this week, I noted how the increasing market share that Mozilla’s Firefox browser is taking from Microsoft’s Internet Explorer would give Google reason to smile. As Lenssen points out, their stake in that battle reveals another reason why Google spends money the way that it does:
[Google] may subsidize a company to skew the market in disfavor of competitors… e.g. when they pay Mozilla developers to progress Firefox, or pay Mozilla when users search Google using Firefox, to balance the market against Microsoft Internet Explorer.
Which brings us to another Google acquisition meant to meddle with Microsoft. Over a year ago, the search giant snapped up JotSpot, a collaborative wiki site co-founded by Joe Kraus, who - back in the day - also founded Excite. All has been quiet on that front for a while, with Kraus being pegged to head up Open Social, Google’s answer to Facebook’s open development platform. Google would had to have forgiven us for thinking they’d bought JotSpot just for Joe.
But yesterday, the announcement came that JotSpot is now Google Sites, a collaboration tool which Google openly admits is intended to be a “Sharepoint killer”.
Sharepoint is Microsoft’s enterprise collaboration software, and Google is gunning for it hard with Sites. IBM’s Lotus Notes will also be a competitor for Sites, but Google is making no secret that the one they want to whip is Microsoft Sharepoint.
My friend Chris Yeh, an investor in and executive with PBWiki, comments at Business Week that while Sharepoint and Lotus Notes may have a legacy foothold in many corporations, plenty of employees who are fed up with the often clunky and convoluted software are quite good at sneaking in free, more easy to use products. He throws out PBWiki’s stats to back this up:
* 450,000 wikis hosted
* More pages than Wikipedia
* Over 1/3 of the Fortune 500
* Thousands of *paying* customers, including Facebook, Symantec, DePaul University, and the FDA
Chris adds:
I do think that it’s a stretch to call Google Sites a SharePoint killer, but at least they’ve identified the right competitor. There is going to be a battle between the on-demand providers and the on-premise providers, and SaaS companies like PBwiki will be fighting with Google against the Microsoft behemoth.
It’s like the old days--Google as an underdog!
We all know what happened in the old days: Google capitalised on areas neglected by the likes of Microsoft, leaving the monolith in the dust. So whether Google Sites is a Sharepoint killer or not, it may behoove Microsoft to act as if it is.
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