George R

Does Google Have a Weakness Microsoft Can Exploit?

Google has three major weaknesses. Every single one of them could be exploited by Microsoft and would lead to more market share in both search and advertising.

Problem is Microsoft is trying mimick these weaknesses rather than exploit them. Much the same as they used to be able to do with software back in their glory days.

I offered to help Steve and his team with this, as I have been accumulating the evidence of these weaknesses here in my offices for the past two years. I was met with bravado and arrogance. Isn't that what most "outside" people who offer to help Microsoft are met with these days?

It will take someone of Microsoft's stature to bring these Google weakneses into public view. As long as Microsoft, under Steve's leadership, is too confused, or too afraid, to take chances, I'd stay long on Google if I were you.

Watch out if these true stories ever do surface publicly, however. Believe it or not, they have something to do with the disgraceful economic condition this country finds itself in these days.

There is a strong and rapidly growing undercurrent out here who knows these weaknesses, has ben harmed by them, and just cannot wait for this market reality and truth to be told.

Internet users, who now number almost 1.2 billion, deserve to be told the truth. From there, they can decide who should be their king.

Ballmer Is Bad News for Microsoft

Hi Jason,

Short ... to the point ... and, dead on. People do not realize how critically important the right CEO (and personality) is to the branding of an international growth company these days.

In Steve's defense, Bill is a tough act to follow. But following such an act with arrogance and a deep inward desire to return to "the glory days" of the past is a doomsday strategy if there has ever been one.

Apple is thriving these days because they portray an innovative leading edge consumer-oriented brand and historical image. There will always be growth in that market. Microsoft's more technical and stoggy brand might be fine for IT professionals and large corporations, but to make any real progress in the consumer and international channels and cultures, something far more radical has to happen.

I have been in the technology branding and image creation businesses for almost 30 years now. Even today, the old Apple ads branding them against "big brother" IBM, and today's branding "Mac" agains the entire "PC" world are award winners if I have ever seen any. They are funny, memorable, and effective.

We'll see how Microsoft's new consumer branding agency decides to take on this battle. Unfortunately for Steve, more than just a "hip" new advertising agency may be needed.

The Microsoft board show know this. But, here again, they are the ones who seem to support the status quo of the present regime.

Maybe Yahoo needed to be the surviving entity!

Should be "interesting"!

George

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What Should Jerry Do? My Advice to Yahoo

This was as good of an article as I have read in months, Tim. Thank you very much. I totally agree with practically everything you said.

I will elaborate on one particular thing you said, however. I firmly believe this "deal" may signal the end of Wall Street as we have known it for the past ten years or so. In my view, that would be wonderful news. Those "fat cats" are simply not able to "fix" technology deals like they used to ... as they do everything else.

They are simply not smart enough these days. People are sick and tired of their greedy ways.

The rocket scientists in the valley and in Redmond blow them away. Where would YOU rather work if given a choice?

Anyway, Yahoo is a "terrific" brand. They are in the top five in Sports, Jobs, Health, News, E-mail, Search, Photos, Small Business, local Newspapers and Directories, and many more areas too varied to mention.

People do not like Microsoft and do not in general see them representing true innovation. That will not get better under Ballmer in my view.

And probably even more important in the long run, people have finally noticed some of the "gray-line" business practices, infringment activities, and corporate ethics out there at Google.

They have preyed on people's apparent ignorance (or at least what
Google perceives as ignorance) for far too many years already.

If the Yahoo folks would simply put their collective heads down and start to work for their shareholders for a change (rather than seeming to be continously in a "scramble"), the results might surprise everyone. Even themselves!

What's wrong with organic growth and profits when you're in so many strong related markets, several of which could become the next Microsoft or Google "killer app"?

Thanks for writing this one, Tim!

George

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Why Do Time Warner and News Corp Want Yahoo?

Nice article, Julia.

I find all of this fascinating from my position as a small business owner and Internet addict.

I do disagree with one of things you said in your post, however. While I see AOL having lost its identity (and its perceived self confidence) on the global stage, I do not see this with Yahoo. I think you, the media, have been too hard on them. As I see it, they are the premium small to mid-size business and consumer brand in the entire Internet space. And their services in finance, real estate, e-mail, personals, and sports seem to have dominant market positions both here in the U.S., and elsewhere. I have been in branding for 25 years. The Yahoo brand is excellent. To me, it still stands for innovation and leadership in a still infant age industry.

Google, while its brand as a word oriented search product, is substantial, has confused the overall market with its investments in green technologies (wonderful industry, and mission, but why Google?), the cellular airwaves, Aerospace, chicken coops, healthcare, and basically everything else its rocket scientist executives can think of. I see the company VERY vulnerable though the Internet's next phase.

By and large, the Internet world's current power players have grown up not liking Microsoft. Microsoft stands for high prices, elitist attitudes, billionaire owners, software glitches, government influence, and a ton of other things that the masses simply do not care for and cannot relate to. I do not see that attitude changing anytime soon, as Ballmer appears to be somewhat arrogant in both his style and his approach towards partnering. He simply does not have the "presence" that Gates had, and still has, on the global stage. If nothing else, the folks from Redmond could absolutely ruin whatever reputation and/or momentum Yahoo has established in the small business, social networking, and higher end of the consumer channels.

My vote. An independent Yahoo, or a Yahoo combined with AOL, Softbank, Alibaba, or even MySpace, is the best thing for the overall market. As a consumer, and as a potential business partner to all of them, I firmly believe that more choice is better than limited choice, and we will all be better off in the next Internet phase with a third leg on this Microsoft and Google dominated stool.

Thanks for sharing your views with the rest of us.

George
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What's Yahoo Worth to Microsoft Without Alibaba?

What makes the most sense to me, Larry, even though I am not convinced that it the best move for this country, is for a group of Japanese, Chinese, German, and/or Indian technology and content companies to come in and take over Yahoo. They could actually pay the folks in Sunnyvale a premium, and probably come out ahead in the long run. More important, perhaps, is that they could stop the spread of "Microsoftism" in their parts of the world.

These are no longer pure American "deals". Folks in Asia and Europe are not interested in this Internet becoming a two man race between Microsoft and Google. It's as simple as that. Why people cannot see this is beyond me.

Hope all is well for you with changes out there at CNET.

George

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Microsoft's Ballmer Starting Own Yahoo-Buying Rumor?

Hi Paul,

Ever given any thought to the possiblity that Yahoo will eventually become the pursuer rather than the pursued?

I have watched this industry very closely for the past 15-20 years and I see a few disburbing trends in today's market. On the other hand, I like the positioning that Yahoo now has.

I would like to see them remain independent or combine with someone closer to their size. They already lead the race in Intenet mindshare ... or are very close to it anyway. I'm not sure I see what Microsoft does for them ... other than a possible "uptick" in share value with the purchase.

Heres' my view of the tech sector these days:

Has anyone noticed the tech industry sell-off recently? I mean the tech "insiders". Folks like Eric Schmidt, John Doerr, and Bill Gates ... as well as a slew of other investment bankers, Chairmen, directors, CEO's, and VPs within some our supposedly strongest technology companies?

I have, especially in and around Google.

But Yahoo seems to be a bit different ... wonder why? Their CEO and others seem to be buying shares and exercising options without dumping the underlying shares right into the market.

I am not a financial analyst. Far from it. But I do know a thing or two about the stock market and advertising. I have been in or around the advertising business for over fifty years now. I've also watched a lot of tech companies rise and fall. I have a vested interest in the technology industries in that I own several companies who participate in the domain name branding and graphic arts content development sectors, both of which are affected by changes in the public perception of, and confidence in, some of the larger companies in our industry. I'm usually the eternal optimist, but I'm worried.

I've watched a handful of publicly traded Internet, software, entertainment, and telecom companies over the past 120 days very closely. Here's a list in descending market cap order as of Monday, August 6, 2007:

- GE/NBC Universal ($399.40B)
- Microsoft ($277.09B)
- Google ($158.59B)
- IBM ($154.82B)
- Apple ($117.48)
- Comcast ($80.29B)
- Time Warner ($72.30B)
- Disney ($68.43B)
- eBay ($45.83B)
- Yahoo ($31.19B)
- Amazon ($32.49B)
- Adobe ($23.24B)
- WPP Group ($17.82B)
- IAC/Ask.com ($8.08B)
- Baidu ($6.93B)
- Getty Images ($2.07B)
- CNET Networks ($1.11B)
- Jupitermedia ($242.00M)

Of these, only GE, Apple, eBay, Amazon, and Baidu had an increase in value over the last three months. Amazon gained the most market value (roughly $4.5 billion) compared to second place Apple at just under $3 billion, while Google leads the losers with a drop in market value of just over $10 billion, with Microsoft a close second at around $9 billion. Any wonder why one of Google's lead investors, its CEO, and other key executives are selling off shares?

In all, the six major U.S. search engine companies in our analysis (Google, Yahoo, Microsoft, IAC/Ask, Time Warner/AOL, and CNET) lost a whopping $34+ billion in just 90 days. I thought profitable search advertising was growing like wildfire? On the other side of the world, China's leading search engine company, Baidu, gained almost a billion dollars in value in that same time period, among the strongest we've studied on a percentage basis.

I must be wrong. I also thought we had been in a strong bull market until the adjustments several weeks back. Wasn't the 14,000 breakthrough this summer a sign of good news for all industries, including "tech"? Better think again.

The money these tech companies are now paying for relatively small online advertising companies is astronomical. Is it possible that all these online advertising companies, and some of their major clients, have been able to "hype" these tech oriented companies and their tech-centric executives? Now wouldn't that be the ultimate "spin"? Don't you just love the ingenuity of these Madison Avenue types ... especially the newer generation that lives on Main Street and focuses on the online world.

With all of these players (technology, communications, entertainment and advertising) now singing from the same song book, and working together on development, effectiveness, measurements, promotions, PR and content delivery, do any us lay people really stand a chance? Open your checkbooks.

"Vaporware meets its advertising match"... don't you just love it?

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Back to Yahoo

Is it possible Yahoo has had this right all along? Although their market value has slipped substantially, their executives seem to be buying Yahoo shares, not selling. They are able to test new graphic advertising techniques without making a multi-billion dollar outside investment, like Google and Microsoft have chosen to do. Wouldn't that be a "kick" if Yahoo has indeed spent this time of industry turmoil and chaos to strengthen its relationships with its advertisers, business partners, content providers, and customers while Microsoft and Google concentrate on destroying each other at all costs.

I am a little biased because I've stuck with Yahoo for the past ten years through thick and thin. But this does make for a compelling alternative to all the negatives I've read about the company from investment bankers, select journalists, and others over the past six months.

What do you think?

George P. Riddick, III
Chairman/CEO
Imageline, Inc.

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