Posted July 15, 2008 3:48 pm by with 5 comments

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Yahoo is in the midst of a three-front war—and yet not one of these fights is for dominance in any field of operations business.

The Eastern Front
Dateline Washington, DC. Yahoo is facing a Senate hearing on the Yahoo/Google search ads deal today. paidContent reports:

Google Chief Legal Officer David Drummond will point out . . . that the agreement does not expand Google’s share of the search market, and that the alternative outcome, Yahoo selling to Microsoft, would be much worse for competition.

Aside from facing the Senate now and other regulatory committees later, Yahoo and Google will face individual states, which are also subpoenaing them.

Yahoo is lucky to have an ally in these battles, even if the ally also happens to be their biggest rival. But that biggest rival happens to be the “enemy” of their next most formidable opponent, Microsoft—and you know what they say about the enemy of my enemy.

The Northern Front
Coming down from Redmond is the next threat: Microsoft. Microsoft is finally responding (via) to Yahoo’s latest rejection (this weekend).

Among other things, Microsoft states that the latest plan was submitted to Yahoo at the behest of Yahoo’s own chairman, Roy Bostock, and did not include a change of governance for Yahoo. However, the deal was for only the search portion of Yahoo, which deal Yahoo was apparently not interested in after all.

While Microsoft claims that they’re no longer interested in Yahoo, they continue to sally on the already-beleaguered Yahoo.

Space, the Final Frontier
And, as always, there’s Carl Icahn, still pushing to elect his proxy board in the August 1 shareholder meeting.

Is it any wonder that Yahoo’s turned to Google for support? But will the search ads provided by their biggest rival be enough to sustain Yahoo through Microsoft’s and Icahn’s continued attacks?

  • Competition is good for consumers, and consolidating the search market too much will lead to overwhelming dominance by Google. This will ultimately detract from the variety of choices an internet surfer can make.

  • Will be interesting to watch Drummond arguing that a Yahoo – Microsoft deal is worse than a Yahoo – Google deal 😀

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  • Competition may be good for consumers, but legal battles. It just drives up cost, and prolongs a resolution. Yahoo is a good company with some solid technologies behind them. It would be nice to see them better positioned in the market.

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  • And the fight for survival will continue forever..

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  • The love start changing to be hate :)…No deal seems will end with war.