Yahoo and Microsoft deal

Yahoo! was the war cry we heard recently, and not only by the Internet giant, but also from Microsoft. Ballmer has finally reached an agreement that allows Microsoft to compete somehow with the Mountain View giant.

Both companies have even created a website explaining (if it was THAT good, why should they?) the benefits of their joint venture. And the market has severely punished Yahoo, while Steve Ballmer tries to convince the public and press that Microsoft's new partner is getting a hell of a deal.

So what is it, then? Is it sooooo perfect and ideal or... there is something more hidden? Yahoo! shareholders clearly think that the deal is a bad choice, and that Mrs Bartz surrendered the technology position of the company. In fact, Larry Haverty, money manger at Gamco (which has 1.6m Yahoo! shares), expressed his concerns in a FT article that Yahoo might become a consumer media company such as Time Warner and might not still be independent in five years.

Therefore, Microsoft is going to spend hundreds of millions of dollars to power Yahoo! search to get a 12% of the ad revenues; Yahoo! is going to obtain a 88% of the ad revenues but will have bigger expenses because the infrastructure of the worldwide sales force and ad creation. Just to keep fighting and trying to get back some of Google's advancements in the multi-billion business that continues to grow.

Different escape clauses might indicate that they are not as sure as they seem... and in my opinion, the only winner in this scenario is Google. Antitrust issues that are making the Mountain View giant shiver might even disappear (look at PCWorld's views) because of the appearance of a new strong competitor. Will the Yahoo!-Microsoft allaince be able to stop the continuous rise of Google? Will they be able to be profitable AND compete in price AND gain positions in the search market share?

Maybe the landscape will change in the future, but not this way. Google will reign until Microsoft stops copying and innovates. Bing is not that good, guys. Change the search paradigm and stop wasting money... before it's too late.