Google shouldn't fear Microsoft!

The iPhone was undoubtedly the tech story of 2007, given the number of column inches and blog posts it managed to generate. And despite only being two months into 2008, it would seem we already have a major candidate for this year's top tech story: Microsoft's planned takeover of Yahoo. Neither Jerry nor Steve has asked me what I think of the proposal, but if they did I'd politely tell them I think it's a dumb idea. If the takeover does go ahead, however, they should at least consider my suggestion for a new business name: "Microsoft!"

Seriously though, what makes Microsoft think it can compete better against Google with the addition of Yahoo? The integration of the various services alone will take more than a year to complete, by which time Google will have enhanced its lead even further, no doubt helped by the addition of the disgruntled top Yahoo talent banging on its door. And lets face it, there's a very simple reason why Google thrives while similar offerings from Yahoo and Microsoft struggle: it simply makes a better product.

It's not just about search either, although I regularly compare each of the big three offerings and end up coming to the same conclusions: Google turns up more, and more relevant, pages. Yahoo and Microsoft also both have comparable web-mail services, yet most of the tech-savvy users I talk to prefer Gmail. Similarly, its products like Google Reader encourage loyalty to the brand because they just work damn well.

Both Microsoft and Yahoo both have the services, but what they need to do is refine them so they work better than anything Google has and encourage users to switch. Again, some unsolicited advice: Imagine what Steve Jobs would do with the service and improve from there. Let's face it, if Jobs got hold of Yahoo you could guarantee that he would create the best user experience on the planet and scare the hell out of Google.

I like some of the stuff that Microsoft is doing with its Live offerings but I get confused by the various brands -- why have MSN and Live and Windows Live and Windows Live Mail and Hotmail and so on. And what is Windows Live Spaces? I'd wager the majority of users have no idea. Adding in the various Yahoo services and brands is going to confuse everyone even more.

And we haven't even started on the lead that Google is forging with the integration of its services as well as its software as a service offerings. As I've mentioned in this column before, I now make use of most of the Google online offerings and particularly like the way you can create things such as blogs, email accounts, web sites and so on off your own domain, making use of tools such as Google Analytics, Calendaring, Notebooks and the rest of it. I'm also starting to make use of the online apps like its word processor and spreadsheet offerings.

Microsoft, as many have pointed out, has no real desire to do something similar because of its cash cows in Windows and Office. Let's face it, if Microsoft had been serious about software as a service it could have made a better fist of it by now. It hasn't and it's unlikely to anytime soon. Yahoo, on the other hand, has no such existing market to protect and could have over time done a much better job in competing with Google (and still can), particularly with acquisitions such as Flickr and other Web 2.0 services.

Which all points to Microsoft-Yahoo being a great story but a lousy merger. I do think it's possible for someone to challenge Google's online supremacy, but I also think we'd have better competing services with all three companies in healthy competition. Here's hoping that's an outcome that can still emerge. -- Geoff Long