MicroYahoo's surprising beneficiary

The Microsoft/Yahoo mashup is a bad deal for consumers and advertisers, because it’s ultimately about eliminating a competitor. But the big winner isn’t Microsoft, it’s Google.
Online audience growth in the US has been flattening for some time, and it’s only going to get flatter. Couple that with a surprising lack of curiosity about new sites among online users, and you have a world where nearly everyone will have to acquire to order to grow.
But the twist is that Google has not had to grow through acquisitions. Their acquisitions have involved technology, not audiences. No matter how many pointlessly geeky lab projects come out of Google, they’re also delivering great, successful products to their users. Even the unpolished Google apps have the sharp, bracing scent of morning about them.
Meanwhile, this deal smells a little desperate.
Does anyone believe that the combination of Microsoft’s and Yahoo’s online grab-bags will be bigger than the sum of its parts? Microsoft may be able to justify this deal if the combined position is significantly larger than their current position, even after the inevitable user and advertiser flight. But there’s no way Google won’t win customers from MicroYahoo.
If this deal happens, look for a period of stagnation, not progress, as Microsoft tries to rationalize and corporatize and synergize the resulting hodgepodge of assets–and liabilities. And look to Google for continued innovation in online services and advertising.
Originally published on my blog at JupiterResearch.