Online business has never been more exciting as Silicon Valley giants Microsoft, Google and Yahoo bid for more online presence and get the lion share of advertisements and users.
The past few weeks, we've seen Yahoo negotiating with Microsoft while cavorting with rival Google. Google and Yahoo seem to reach an understanding. Microsoft and Yahoo are temporarily at odds with each other. The Silicon Valley love-hate-triangle seems to be intensifying as deals are being negotiated by all sides.
Is it possible for all three to work together? By the looks of it, this could be a distinct possibility. With Yahoo desperate for more customers, Google, dangling an irresistible partnership deal on advertising and Microsoft, wanting to penetrate the online business world, this scenario would not be far fetched.
Yahoo
Yahoo is in a bind right now. Among the three powerhouse, Yahoo is the one having troubles. In its bid to thwart the competition Google for the best web search company title, it has forgotten to develop its other important features. Thus, they find themselves unwittingly biting Google's dust.
Google
Google is unquestionably the force to reckon with when it comes to web search and brand advertising field. It has dominated the web search industry hands-down and beaten internet media pioneer Yahoo in that area. But Google could not be complacent especially if Microsoft is now making plans to enter the online industry.
Microsoft
Microsoft is the most profitable technology company to date. It is the software giant that also sells personal computers. Being Fortune 500's no. 44 most profitable company in 2007 with net profit margin pegged at $14.1 billion for personal computer sales alone, Microsoft is in a very comfortable position. This year, its most ambitious move so far is to offer Yahoo $44.6 billion. Microsoft is aware of the huge potentials of internet technology. So far, it has lagged behind in internet presence compared to Yahoo and Google. That is why it intends to enter this highly competitive arena in the coming months or even years. Steve Ballmer himself admits that “the future of the way people consume information, the way people socialize and connect is going to change a lot more in the next 10 years even than in the last 10.…... We are absolutely committed to be the leading player in that endeavor.”
Analysis
The name of survival of the game has always been challenge and response. That is why Microsoft and Google have remained on top of their game. It is in their abilities to respond to changes and be able to adapt to it. They also spearhead in introducing innovations in their fields. Needless to say, that is how these two giants manage to stay in shape - their ability to rise up to challenge enables them to lead the pack.
In the same vein, that is the very reason why Yahoo is a step behind. Yahoo's complex organization has somehow failed in responding to competitive threats. Response to the challenge came a tad late hence the reason for its dilemma right now. Yahoo's current status is not a result of one wrong decision or one instance of inaction. It is an amalgamation of various factors and poor decisions which has piled up through the years. It has floundered for the past 18 months but the trouble started two to three years ago.
What's Yahoo to Do?
There is still hope though for Yahoo. All is not lost for this internet pioneer media.
First, Google's strengths could be its own weaknesses. Its specialty is in the web search and search advertising areas. Due to this, Google has to spend most of its time on these two lucrative endeavors. The best strategy for Yahoo then is to could focus on other areas Google is not strong at. What those areas are, that's what their research department should find out. Once they found their niche, they need to develop it and strive to be ahead and stay ahead of the competition.
Second, social networking sites are gaining popularity these days. Google has tied up with Myspace for its advertising endeavors. Yahoo should do the same. They can tie up with Facebook or buy Facebook if they have the financial machinery to do so. If not, they can always start their own social networking site.
Third, Videos are also gaining prominence. This is one area Yahoo could look into and develop. Mobile phones are making it easier to upload videos on the net. Mobiles and videos still have huge potentials. Advertisers follow where the customers are. And videos like youtube are where customers are hanging out right now.
Lastly, leverage their 12,000 strong employees. Too much ideas and too little execution could be Yahoo's undoing. Management should learn to work with those at the bottom to come up with profitable ways to turn the company around. The decision making process is not exclusive to the management. Employees at the lower rung of the ladder should be allowed to contribute.
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