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So it seems Yahoo is turning down Microsoft's bid for the company. And I can't help but laugh. And not just because Microsoft was told "no." Though I would love to have seen Steve Ballmer's face when he read it in the dailies.

Yahoo says the $44.6 billion bid "massively undervalues" them. Some assume the company may just being playing hard ball. But there's also reports Yahoo has renewed merger talks with AOL.

Of course, a merger or buyout with any of these three companies is an attempt to try and compete with Google, the king of all search engines. And I realize that the alliance is more about brand power than functionality. If Microsoft joined forces with Yahoo, it would appear, on paper at least, that they were some kind of Internet dynamo. And that certainly could woo some of those sexy advertising bucks. For a time.

But in the long run, I don't see the marriage being profitable. Sure Yahoo's search may work somewhat better than MSN's and combining the two could make a slightly better search engine. But it still won't hold a candle to Google. Part of the reason Google became number one because it did some that other search engines of the day couldn't. By indexing pages as it does, it was able to present the results in order of popularity and group similar results from the same website together. And over the years, they've added a plethora of other features, such as image searches, maps, translator services etc.

So what Microsoft or Yahoo or even AOL needs to do if they want compete seriously is to create or buy the better search engine. This search engine needs to do something that Google doesn't. Take, for example, Clusty. Although it doesn't have wide database of results as Google but it delivers search results in clusters. So if I type in "cows," for example, I get the standard list. But on the left navigation bar, it show a series of related searches, such as 36 results for milk, 24 for cattle, 9 for moo and so on. You can also differentiate by source or site extension. Essentially what you get is a smarter search because the engine is able to discern related terms to your original search words. But, of course, if Microsoft was to buy Clusty it wouldn't be nearly as big a headline as its courtship of Yahoo. And people certainly wouldn't be talking about it for over a week. And I guess, that's the point. It's about generating talk about the companies.

So I imagine Microsoft will make another offer for Yahoo and we'll all talk about it for weeks to come. Is it a good move? Probably not. But I'm sure in another five years Google will buy out both of them anyway.

About G4 in Canada
G4 Canada (formerly TechTV Canada) launched in September 2001. G4 is the one and only television station that is plugged into every dimension of games, gear, gadgets and gigabytes. Owned Rogers Media Inc., the channel airs more than 24 original series. G4 is available on digital cable and satellite. For more information, see www.g4tv.ca.

Tech News on G4

Bidding for Yahoo

February 14, 2008

By Adam Swimmer - G4 Canada