VideoVoo: Online Video Marketing

Google Official blog has started its lobby against a potential Yahoo buy-up by Microsoft. Yes, it is and will be a continuous anti-trust shouting game between Microsoft and Google. It is clear that Microsoft would be a super mega software - internet empire with Yahoo, and it is also clear that Microsoft won’t stop courting Yahoo, why would it? It is moving on the set rails of competition and acquisition. Just as Google has bought up YouTube or DoubleClick, to name but a few - again, following the rational rules of shareholding. Would Google be an Alien if Microsoft Predator buys up Yahoo? Not at this point: these days Microsoft would become very suffocating, added percentages of the market share show. We need a more balanced market - but it seems that none of these big guys can move against the rules set and operated by their self-created competitive context heavily moving on an international map with looming Chinese, less agile European, etc. competitors. Or can they? Yahoo would need help from Google: “But if Yahoo spurns Microsoft, analysts believe it probably will have to swallow its pride and forge an advertising partnership with Google if the alliance could win antitrust clearance. Under this scenario, Yahoo would rely on Google to run its search engine…”It seems to us Google has its, not Yahoo’s, best interests in mind,” [analyst Justin] Post said.” (NYT) It is not a happy prospective either.

From the Official Google Blog:

So Microsoft’s hostile bid for Yahoo! raises troubling questions. This is about more than simply a financial transaction, one company taking over another. It’s about preserving the underlying principles of the Internet: openness and innovation. Could Microsoft now attempt to exert the same sort of inappropriate and illegal influence over the Internet that it did with the PC? While the Internet rewards competitive innovation, Microsoft has frequently sought to establish proprietary monopolies — and then leverage its dominance into new, adjacent markets. Could the acquisition of Yahoo! allow Microsoft — despite its legacy of serious legal and regulatory offenses — to extend unfair practices from browsers and operating systems to the Internet? In addition, Microsoft plus Yahoo! equals an overwhelming share of instant messaging and web email accounts. And between them, the two companies operate the two most heavily trafficked portals on the Internet.

How competition is getting more balanced and more fruitful in the long term? At this point all I can say is that I shout with Google: don’t Yahoo, Microsoft, it would be unbearable. And I also wish to see Yahoo stand up, build fantastic things, but with the failure of their long-awaited Yahoo Panama search marketing platform, the moment has gone away. I also like the fact that Google is not powerful everywhere (e.g. the Russians prefer to use their own search engine, just like the Chinese), and that Firefox is taking away users from IE - seeing a multiplayer market is great. But there are threats, and we need to say STOP. A Google helped Yahoo (80% of search in US) sounds a bit better than a Microsoft bought Yahoo. But both sound bitter, in fact.

(The lucky thing is that there is a growing tendency among employees to leave big companies and start a new chapter - with the knowledge sapped from the biggie. But it does not seem the majority.)

For a totally different - and I think very controversial - viewpoint, read what Marc Andreessen says about how an imaginary Microsoft owned Yahoo would influence Silicon valley startups: “The Microsoft/Yahoo deal, if it happens, means very little for the entrepreneurial climate in Silicon Valley, or the opportunities available to you and your startup.” I couldn’t disagree more.

Microsahoo Combo?

Ian Macfarlane writes “Presuming that they don’t have to divest any of their divisions, the combined company would be much stronger in many markets such as display advertising, email, instant messaging and maps (although they will still trail in search). In webmail (where, if you discount MySpace, Yahoo! and Msn Hotmail are number 1 and 2 with GMail trailing far down in third). In display advertising, according to comScore, Yahoo! is currently #1 and Microsoft is #3, with Google trailing for now, at least until their DoubleClick acquisition goes through. The combined company would have the largest market share in both of these areas. It would also be a solid competitor to AOL Instant Messenger, the current IM market leader, and, based on these recent Hitwise statistics, it would be fighting with Google for the number two spot in the maps market, with the market leader here being AOL’s MapQuest.”

Online Video Market 

As for online video streaming, Google has practically about a third of the total US video streaming thanks to YouTube and Google Video (plus the universal search results combining video, text, images, maps, etc. all in one blended search list). So streaming data shows that a potential Yahoo dangling in the Microsoft basket would not mean as much advance for Microsoft as in the general search and display ad market - at least in the US. Google boasts approx. 3,000 mm videos viewed, while Yahoo had roughly the tenth (328 mm) and Microsoft 181 mm video views in November 2007 in the USA.

But, and but there is, the number of unique video viewers would increase substantially. The data of US unique viewers shows that Google video sites rule approx. 50% of the online video market by 76,187,000 out of 138,383,000 UVs (which means 41% of the total internet users). A combined Yahoo (37,300,000) and Microsoft (28,470,000) unique viewer statistics is very close to the total Google video stats, reaching  65,770,000 unique visitors with videos, according to comScore stats.