eStrategy: Kill Google (Part II)

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Yahoo gets Googled!

For those of you who remember the hay days of Yahoo might also recall the birth of Google. It started as the search engine on Yahoo. Now, it is beating the pants off Yahoo in just about everything Yahoo does. Most importantly, it is beating Yahoo by a mile on the thing that counts the most – profitability.�

Yahoo, like IBM was the 20,000 pound elephant that could not dance anymore. As it lay on its back, Google pulled a Microsoft on it. This one-two punch is very simple. Google established a relationship with Yahoo to:

1. Market Entry: let users experience its search technology. Google did not have a prayer of getting where it is today without riding Yahoo’s coat tails.
2. Competitive Chokehold: Yahoo, having found the excellent search engine had no reason to invest in its own search technology. Yahoo search was sitting on the sidelines while Google invested heavily and took an even bigger lead using Yahoo’s dollars!
3. Customer loyalty: all the while building a transferable customer base which loves your product.

There are many similarities between these two stories – Google and Microsoft’s. Both came from nowhere and became giants in their respective fields. Both rode the coat tails of established giants who were asleep at the wheel and had to give up lucrative segements of their market. IBM gave up the PC software business. Yahoo is all but non-existent in the online search advertising business.

The good news for Yahoo is that IBM is still a strong and vibrant business. Yahoo just has to find its core like IBM did.

Now, the fight becomes interesting because the challengers face off.