There was a rumor from one of the CEO candidates for Microsoft recently. The idea was floated that, perhaps, they could sell Bing to somebody else and then start to pare down the Microsoft business to enable some growth. To me personally, this is like their strategic decision to invest late into Facebook and forge such a deep relationship. As a company, it was one of their best, long term investments ever. The investment thesis behind grabbing that Facebook stake was the same one that now should prevail them to dislodge the search business.
Yahoo has a history with search (and for a while, I played a tiny role in a much larger play), which Marissa also shares, having been the, “Search girl,” at Google. Microsoft has put their money into the full stack competition on the consumer side and to do that, they’ve made very strategic moves already, from the Barnes & Noble Nook deal to the Surface to the Nokia move, Microsoft is very, very serious about hardware. This ensures that they have a foothold, a front door, to complement their Enterprise position and their other consumer front door, which is the Xbox.
Microsoft has a lot of strong brands and to ensure a better focus on their core business, pushing search back into Yahoo’s hands is a no brainer. Apple would love an alternative that could replace Google, and with that distribution deal plus MIcrosoft, Yahoo would be in a position to own the majority of the mobile search market. The only player without a bone in the hardware game, Samsung, LG and others would have to give the Yahoo deal serious consideration. Firefox OS, too, as well as their desktop business, could follow if the economics were right.
Given so many players would give it real consideration, I predict this is one of the most exciting moves that could happen in the digital space for the next five to ten years. By taking mobile search, Yahoo could fund and fuel the kind of disruptive, future and forward thinking that Google’s, “Ten-x,” projects do. The market has seen this movie a few times, and with better search also comes better logistics.
The future state could see Yahoo algorithms generated from advanced search personalization also enabling, “Same day,” goods transfer for both Craigslist and ebay. This would rival the Amazon, Google, Walmart strategies against the same, “Glue,” between online and offline commerce.
There’s a lot more to write on this topic, but for me personally, I’d love to see the whole corporate theater play out this way. As the only player with search scale that doesn’t have a hardware strategy, Apple, in their, “Thermo-nuclear,” option would certainly want this to succeed. Between those two corporate investments if needed, Yahoo could plow any amount of money, talent and perks to creating the very best discovery engine online. Their China position, coupled with a partnership in Yandex, could give Google a very real, serious global competitor. It might never be that Yahoo owned both mobile and desktop but for any viewing experience, the company would be in a position to own the syntatic glue that put everything together.
After giving this scenario serious thought over the past few weeks, since I first saw the potential Microsoft CEO saying that they’d consider selling Bing, this scenario has been slowly percolating in the back of my mind. I love the ideas and would enjoy seeing a Google competitor for search. Advertisers would also tremendously benefit at the size and scale of the new Yahoo’s reach and return on ad spend.
Offline data, in the form of mobile search, would be a huge asset to the company as they engage in more and more mobile search. After being able to target with such rich meta-data, their capabilities could potentially be first, at least with mobile, of any ad platform.