Google Still Unchallenged

By Rob Pegoraro
Thursday, May 8, 2008

The Microsoft-Yahoo soap opera seems to have reached its last episode: After months of squabbling and snippiness, last weekend Microsoft yanked back its purchase offer, ending its bid to buy Yahoo.

It's tempting to greet the news with a yawn. In the end, nothing happened. And even if Microsoft had succeeded in its bid to buy Yahoo, individual Web users would have waited months, or maybe years, to see noteworthy changes from the deal.

The odds of any exciting new chapters in the story are low as well. The unhappy couple could patch things up but will probably move on to the mutual-recriminations stage. Yahoo may seek comfort in the arms of another Internet company -- maybe IAC, maybe a newly spun-off AOL, maybe somebody else -- while Microsoft can talk about how Yahoo wouldn't have been any good for it in the first place.

But whatever these two companies wind up doing, one question will still await an answer: Who's going to provide Google some tougher competition?

It's not that Google is some tyrannical monopolist that must be brought to justice. This company has come to dominate the markets for Web search, advertising and many other services fairly, by providing quality products at a fair price (which, for most Web users, is free). It's moved when others have stood still: Imagine, for instance, how limited Web-mail and online mapping would be if Google hadn't reinvented each category earlier this decade.

But that doesn't mean that I want it to run away with the rest of the market. It's fundamentally unhealthy for any one company, even one that claims to have "Don't Be Evil" stamped on its corporate DNA, to amount to the crossroads of the Internet.

I write this as somebody who happily uses multiple Google services but is leery about giving this company much more business -- and who already holds back from using some Google sites that seem attractive on their own.

It's not enough, however, for civic-minded Web users to try to keep Google honest. Its competitors need to do a better job of providing alternatives.

Microsoft and Yahoo have often failed at that goal, in part because they've distracted themselves so often with big-picture strategic shifts. Microsoft has shuffled brands -- MSN, .net, Windows Live, Live Search -- for mysterious reasons, confusing customers in the process. Yahoo has wasted billions of dollars on acquisitions of smaller companies that it fails to capitalize on (anybody still use GeoCities?), like a kid who can't stop himself from breaking his new toys before he gets out of the store.

So before Microsoft and Yahoo start talking about a recast merger or any combination with other Web firms, they ought to tend to more basic tasks. A few humble suggestions:

· Yahoo's free Yahoo Mail needs to go on a diet. Its slow, cluttered home page compares poorly to both Google's Gmail and Microsoft's Hotmail (er, Windows Live Hotmail). And neither Yahoo Mail nor Hotmail lets you download your messages free to any other mail program, as Gmail does. Even as always-on Internet access grows, the ability to get your data out of somebody else's Web site and on your own computer still counts for a lot.

· Yahoo's Flickr photo-album site is one of its strongest assets. But why is it still priced as if it must keep a start-up afloat? Making effective use of Flickr, even just putting up four photo albums at a time, requires paying $24.95 a year for a Pro account. Competing services like Google's free Picasa Web Albums offer far more features.

· Microsoft has one of the best maps-and-directions sites in Live Search Maps, and Yahoo's own mapping site offers some interesting features absent from Google Maps. But Google's online cartography is more interactive and available on more phones than either Microsoft or Yahoo's versions.

· Memo to Yahoo: Ever heard of blogging? Ever heard of social networking? Why do you have no real presence in either area?

· Memo to Microsoft: Treating your Web portfolio as a marketing tool for Windows might not be the best idea. At best, this is an indirect way to push sales of Windows. At worst, pushy salesmanship repels people who have chosen to run other companies' software.

· Microsoft also needs to stop pretending that it can keep countering the Web-based programs released by Google, Adobe and such start-ups as Zoho with conventional disk-bound releases.

· Both companies should note how many areas Google has left open, such as online file storage, event planning and address-book-sharing. They have excellent chances to jump ahead of Google in these markets.

A splashy merger would have ensured Microsoft and Yahoo a prominent spot in the headlines, but now it's time for these companies to focus on earning themselves new places in their users' Web bookmarks.

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