Monday, April 16, 2007

Microsoft and others' emotional outcry over Google's Win

This was bound to happen. Microsoft lost the DoubleClick battle to Google and is now leading the rally against the deal along with Yahoo and AT&T. The reason: Google's acquisition of Doubleclick will make it a real brutal force in online advertising which is being termed as "Monopoly" by the competitors. The second concern, which seems logical, is related to the usage of personal data which is being collected by DoubleClick.

I anticipated this action from Microsoft and probably others as well and hence waited to write about the same. The surprising fact is that it is coming from companies which in a way are the most dominant players in their own markets or have had a monopolistic history. Microsoft has almost 90% of the consumer OS market share, Yahoo enjoys more than 50% share of personal pages with My Yahoo, and AT&T was a telephony monopoly until 1980s.

Let's first look at the definition of "Monopoly" from Wikepedia:

In economics, a monopoly (from the Latin word monopolium - Greek language monos, one + polein, to sell) is defined as a persistent market situation where there is only one provider of a product or service. Monopolies are characterized by a lack of economic competition for the good or service that they provide and a lack of viable substitute goods.

In no way, this deal can lead to a monopoly as prior to the acquisition, Google and DoubleClick had different products and had their share of competitors. The merger of these two can definitely lead to a new business model in online advertising but monopoly.

This also goes on to proving that all the anticipation about this deal not making sense and Microsoft intentionally losing the deal is not true. The truth is clear; Microsoft/Yahoo wanted to buy DoubleClick but could not.

Microsoft and Yahoo: there is no good in crying over spilled milk. Go ahead, build better products and services which create value for advertisers and publishers. If you can, they will come to you; but if you can't, at least do not be an obstacle for someone who is doing it.


Sandip said...

I agree. This is a typical losers attitude. What if they had managed to snag Doubleclick themselves. Wouldn't that have been a formidable entity?

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