The Google Strategy Will Backfire

Google's noisy interjection into Microsoft's bid for Yahoo! is simply a bad strategy.

In fact, it feels downright tragic, reflecting the tremendous naivete that apparently can't be avoided when you go from start-up to world dominator in a decade and a half.

Why is it such a bad strategy? Four reasons.

1. Google hit the image tipping point long ago. While they still undoubtedly view themselves as the bright, sunny boys of internet magic, the rest of the world has adopted the skepticism that comes when any one company or individual seems to amass too much power. They severely over-estimate the goodwill they will encounter, and they also under-estimate how much the broad antipathy against Microsoft has mellowed in recent years.

2. They are stirring the wrong pot. Google is the dominant player in the very segment to which it seeks to bring scrutiny. No good can come of this for them, particularly with a new White House administration looming. While some may argue that inflating the importance of a Microsoft/Yahoo! combo would help justify a Google grab for AOL, it's much more likely to simply bring attention to the fact that a couple of players are exerting increasing dominance over what feels like a public domain.

3. It looks panicky, and validates the deal. Until Google protested, the bid was generally seen as too-little, too-late and too-lame. But if Google is so eager to stop the deal, there must be something there we were missing, right?

4. They will fail in stopping the bid. And that will give added momentum to the merged competitor. Yes, Microsoft may have to shed some of Yahoo!'s assets to get clearance. But the deal will likely go through, and it will be viewed as a triumph of Microsoft over Google. If they had stayed quiet, the deal would still be viewed as a desperate ploy.

Most seasoned companies in Google's position would have done three things.

1. Talk soft and low. Google should limit their public comments to something like this: "We believe competition is good. We're sure the authorities will give close scrutiny to the deal. In the meantime, we'll continue to focus on creating the superior products that have made us the clear leader."

2. Quietly work like hell through third parties. Google should make sure the regulators slow the deal as much as possible, and that rival bids force Microsoft to pay as much as possible. Allowing or enabling leaks about such conversations undermines the story. If no bids now arise, it will be perceived as a Google failure.

3. Mash the accelerator. Google should aggressively capitalize on the distraction of the deal and the integration process, widening the performance gap as much as possible.

Add Your Comment

Add Your Comment

Report Abuse

Archive

May 2008

Categories

Links