My Concerns About The Proposed Google-Yahoo Search Advertising Deal (In Context Of AOL Search & Ask.com)

The current state of Web search engines is as follows:-

1. Google: Search results = Google | Ads = Google
   
2. Yahoo: Search results = Yahoo | Ads = Yahoo
   
3. Live/MSN Search: Search results = Microsoft | Ads = Microsoft
4. AOL: Search results = Google | Ads = Google
   
5. Ask: Search results = Ask.com | Ads = Google / LookSmart
   

My present concerns are as follows:-

1. Google already powers search results on 2 of the top 5 search engines, and ads on 3 of the top 5 search engines. In effect, although we have an impression that there are 'Five' distinct search engines, in reality we have only 4 search engines and only 3 mainstream search-ad engines. AOL and Ask.com nicely create an impression of prevailing competition in the search engine business, while hiding the fact that Google powers them in one way or the other.
2. Far more important than the number of top search engines powered by Google's search results and Google's ads is Google's 'share' of search results and search ads. If both direct and indirect counts are made, Google is an unquestionable monopoly when it comes to search results and search ads.
3. Google's share in the search engine market is growing relentlessly month-by-month, further choking the air supply of the few credible alternatives left and sending them into a downward spiral.
4. Since search engine business is very capital intensive, it's almost impossible for any startup to compete with Google (and other top search engines). Look at Cuil and Wikia Search- both started off with lots of buzz and media coverage, and now have been relegated to the 'virtually non-existent' and 'insignificant' category. Their presence or absence doesn't matter.
5. It is possible (and likely) that in the next 2 years, Google will have over 90% of search engine market share, a dangerous situation for the Web and for the search business.
6. Ask.com is the leading underdog out of the top 5 search engines. Its search results page already seems to rely more heavily on Google-powered ads than on it's organic search results and embarrassingly, many times the ads are more relevant than the search results themselves. I have observed that Ask.com gives irrelevant results non-infrequently, and if it wishes to maintain or grow its market share, it must switch to search results of Yahoo. I believe that Yahoo-powered search results and Google/Yahoo-powered ads is a life-savior combination for Ask. Also, Ask should sell its search engine intellectual property (algorithms, engineers, patents, etc.) to Microsoft, as it's unlikely that Ask will be able to compete with the other search engines with its own search results. Finally, the user interface of Ask.com is cluttered, complex and slow, and Ask must revamp its user interface (especially the search results page) if it wishes to stop its audience from defecting to rivals.

The above list will look like the following if the Google-Yahoo deal does take place:-

1. Google: Search results = Google | Ads = Google
2. Yahoo: Search results = Yahoo | Ads = Yahoo & Google
   
3. Live/MSN Search: Search results = Microsoft | Ads = Microsoft
   
4. AOL: Search results = Google | Ads = Google
5. Ask: Search results = Ask.com | Ads = Google / LookSmart
   

My additional concerns, if the deal does take place are as follows:-

1. One out of the only 2 credible Google alternatives (Yahoo and Microsoft) will start to get dependent on Google. Increased cash flows because of Google ads will leave little incentive for Yahoo to innovate and improve its advertising technology. The deal is a poison pill for Yahoo, and although Yahoo contends that increased cash flows from the deal will allow it to make investments to improve its advertising technology, the will make Yahoo's advertising system less attractive for advertisers and Google's platform even more attractive, thus further decreasing the profitability of Yahoo from its own ads, and making it more dependent on Google ads (for revenue). The downward spiral may actually lead to a collapse of Yahoo's ad system.

In summary, I believe that this proposed deal should be blocked, so that Yahoo is forced to innovate and improve its own search engine and advertising network. This will be good for both Yahoo and the Web- in the long term.

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