John Battelle makes a modest proposal on his blog — Microsoft and Yahoo should team up to take on Google.
For example, it lets Yahoo and Microsoft focus on what they are good at. For Yahoo, that's digital lifestyle applications and services and the CPM ad revenues that come with them; for Microsoft, it's Windows and Office (and MSN, I guess….). Despite the packaged goods mentality displayed by the "well, we're done with Vista, now we can focus on search" approach, the initial response to Vista is proof enough Ballmer & co. might want to keep its engineers focused on the product that drives the majority of your revenues – Windows. And little birdies all over the Valley tell me folks at Yahoo are tired of the search-driven fire drills there, they want to get back to the cool stuff like Pipes….
A second and substantial reason to do this is to stop trying to kill each other in the race to catch Google. Separately, neither company is going to catch Google anytime soon. Why not work together, combine resources, and give the world what it really wants – a legitimate answer to Mountain View?
The company might work like this. Because Yahoo is further along with Panama and YPN than Microsoft is with AdCenter, Yahoo gets more credit in the JV for that asset class. Microsoft, because it has more cash, funds the lions share of the JV. Should each company also toss in organic search? To be discussed, but not necessarily required.
Google makes wonderful stuff; just think how much more wonderful their products could be if someone was seriously competing with them.
