Yahoo's Pipe Dream, Diller's Decision


The editor at Fortune seem to think they have come up with a set of circumstances in which Yahoo! could catch Google in the search industry.

That’ll be the day.

Fortune wants its readers to believe that if Yahoo! and Microsoft team up in search, that with Yahoo!’ snew ad search technology, Panama, the combined entity might get close to Google in market share. Industry estimates are that Yahoo! has about half the number of advertisers that Google has.

The next part of the plan is that, part of Barry Dillers IAC/Interactive put its search audience into the anit-Google pot. Ask has a deal with Google to run text ads that expires in 2007.

The process has several flaws. The first is that no one is sure that Yahoo! Panama is better that Google’s system. That won’t be known until it is in the market for some time. It is also not safe to assume that Google will keep its current platform without making its own major improvements.

Could Yahoo! pull MSN and into a three-way partnership. Three ways is tough. Who runs it? What are the revenue cuts? Won’t Google come in and try to buy one of the partners out to prevent any alliance that might threaten it?

The editors at Fortune might want to find another topic.

Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.

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