As reported last week, Microsoft is slated to become the functional search engine provider for Yahoo’s long-running and highly popular service (presuming the deal is sanctioned by the government). Under the terms of the ten-year agreement, Redmond will provide all the back-end horsepower and results. They’ll get 12% of the revenue generated during this period. The Yahoo name will (at least for now) remain on the masthead and is what users will see.

Is this the beginning of the end for Yahoo?

According to executives, Yahoo wants to “refocus” on newer products now in development. Why they want to do so while their search service is one of the top three in the marketplace is unknown. Search is the company’s bread and butter, like Google. And they’ve now opened the door to the Trojan Horse that is Microsoft. The end result could be a better Yahoo…or total fragmentation of the company into virtual nothingness after Redmond “negotiates” a more favorable deal for themselves a few years down the line. Only time will tell.

The strange thing about all this is Microsoft’s addiction to becoming a “search leader” in the market. They’ve tried for years, and have failed consistently to capture more than 1/3 of the market. Google is firmly on top, is constantly improving their core product, and its users are unlikely to change. Somehow, Microsoft believes that if it can get “more data” about user behavior from its deal with Yahoo, it’ll cause users to abandon Google in favor of its services. That’s not likely to happen. Once a user becomes comfortable with a given interface, they’re unlikely to abandon it without a very good reason.

This is, in fact, the primary factor behind the popularity of many of Microsoft’s own products — especially Windows-supplied tools like Internet Explorer and Outlook. Get an application in front of a user’s eyes first, and they’re not likely to look for another one. So the chance of Microsoft pulling business away from Google is probably very low.

I think the executives in Redmond are just obsessed with Google. It’s their own personal Great White Whale, and they’re determined to harpoon it no matter what. But we all know how that story turned out. And Yahoo might just be the Pequod that ends up being sunk as a result.

This entry was posted on Monday, August 3rd, 2009 at 6:28 pm and is filed under Industry, Technology, Web Surfing. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.