Microsoft buying Yahoo! is a story that has been told a million times, but should Google be quaking in their substantially proportioned boots? Or will it be the beginning of the end of search competition as we know it if the $44billion purchase goes ahead?

Negative effects for Google

Microsoft Live Search has always been a sleeping giant when it comes to Search Engine competition, being one of the largest money making corporations in the world means that funding has never been a problem, but skill and experience has. If Microsoft acquires Yahoo! It will not only remove a direct competitor, it will attain a large number of highly skilled workers that know what needs to be done to catch the Google steam train.

With Yahoo! recently laying off staff, spells out to me a cut in resources, if Microsoft gives the Yahoo! developers a free reign, they could really give Google a run for their money within the next 3 years. I see Yahoo! as a sinking ship, losing ground in all their trusted, historically successful areas; email, search, news etc. This is surely their only shot at being numero uno.

Another benefit from a Microhoo search engine perspective is the sales of Microsoft applications, operating systems and software, all of which could contain a Yahoo search function and thus promote the brand.

Positive effects for Google

As with Microsoft, Google is essentially losing a competitor if they join forces. Yahoo! still takes around 12% of all search queries, with Microsoft taking 5%, so combined 17% is still comparatively falling short of Google’s massive 77% in the UK.

This could be the last act of a dying beast, Yahoo! and Microsoft teaming up in a David and Goliath style duel, but this could spell desperation from both parties. There is also a good chance there will be conflict between parties, in which case Google will be sitting pretty if Gates and co start throwing their weight in camp Yahoo!

Microsoft also have not got a great reputation in investment, the consequences of failure are unthinkable for Yahoo! and Microsoft as brands, but could lead to a potentially massive 90%+ share of search traffic.