Tuesday, February 05, 2008

What is Google's Next Move?

With Microsoft making a bid for Yahoo, in an effort to compete more effectively with Google, Google has stepped up its efforts to derail the deal by throwing out the antitrust card. Jim Goldman of CNBC has a great take on this. Google has seen their share price drop below $500 a share for the first time since August of 07 (Goldman has another great post on this drop) and for the first time, that I can remember, is actually on the defensive.

Well, the old saying goes "the best defense is a strong offense" so look for Google to ratchet up their efforts to derail this deal. Maybe their infamous "do no evil" mantra can be put in the back room for a couple of months, while they pull out the big guns. So what is next for Google?
  • Look for Google to continue to press the FTC to take a look at this deal, if for no other reason then to slow it down.
  • Google would certainly like to partner with Yahoo for their paid search business but I see this as a last resort for Yahoo, after all other options have been exhausted.
  • I think eBay is in play and Google may consider a bid for the company. Now that Meg is gone, this may actually have a shot.

One thing is for sure, Google can't just sit on their hands waiting for something to happen, if the deal goes through they will need to strengthen their business to maintain their position and an acquisition of eBay would make sense on a number of levels:

  • Google could integrate PayPal into Google Checkout and instantly become the leader in online payments.
  • Google is a technology company and would be able to improve eBay's marketplace business. Can you imagine a Finding 2.0 designed by Google?
  • Skype would have a home and finally be able to extend its #1 position in the Internet phone business.
  • Google would be able to expand its product search business and become the defacto search for ecommerce on the web -- even before Microsoft and Yahoo figured out what hit them.

Of course eBay could decide to merge with Yahoo in a defensive move, to keep from getting swallowed up by Google.

Google, its your move!

Just my 5 cents!

1 comment:

bonni said...

It's my understanding that Google offered to include PayPal in Google Checkout and eBay declined, and then banned Google Checkout as an allowed method of payment on eBay (as it is, still).

So I kinda doubt they'll be adding PayPal at any time soon.