Google’s main asset is not its technology… but its distribution and monetization - two things we’ve long pointed out.
Fortune has a good write up on this:
No, what Google has done is not to have created the world’s best tech company but to have created the world’s most powerful and profitable marketplace. The development of that marketplace flowed from having superior search technology in the company’s earlier days. But today Google is not unequivocally the best place to search for information.
Microsoft owns a site called Live.com that offers search results that in many cases are just as good as Google’s, and sometimes are better. But nobody knows Live.com exists, and there’s little likelihood that will change.
Microsoft knows it must create not comparable search but a comparable marketplace. Both in my most recent magazine opus on Microsoft and in an earlier story I wrote about online chief Kevin Johnson, I explained the Microsoft view - the more searches that take place on a site, the more advertisers who are likely to come there. And the more advertisers who are there, the more bidders there are in competition for slots adjacent to the searches. Thus, the larger a search company’s scale, the more money it can charge per search. Not only is Google larger, but it is more profitable per search.
Read more. It’s a shame YHOO was too stupid to take the $45B offer and become relevant in search. Instead, it will still lose independence to MSFT but not cash out the way it could have. Oh well…
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