Who Can Compete With Google?

May 4, 2008— -- It was supposed to create a new top result for the Web search, "Who rules the Internet?"

Microsoft, by aquiring Yahoo, was going to become big enough to be the giant killer that could take down Google -- something that neither of them alone stood a chance of doing.

If the guys at Google were worried about the potential threat, they now can rest easy. Microsoft dropped its blockbuster bid to acquire Yahoo late Saturday, after the two companies could not agree on a price.

The software giant withdrew its offer just hours after it sweetened the bid to $33 per share, or about $47.5 billion.

It was the culmination of a three-month courtship that Microsoft began on Jan. 31 with its unsolicited bid, made in an effort to compete more effectively with Google for online advertising revenue and Web searches.

"Google is a giant that no one can topple in any way. So when you're a giant you get to rule the roost," said Kara Swisher, co-executive editor of The Wall Street Journal's technology Web site, All Things D.

Google became dominant with an innovative search engine, and makes money with ads targeted to your searches. Now Google offers free versions of the things Microsoft wants you to buy, such as e-mail, calendars and word processing.

"Google has the same things. They offer them up for free, and they're getting better all the time," Wired Magazine senior writer Daniel Roth said.

So from a consumer's point of view Google's dominance is not necessarily a bad thing. It's hard to complain about getting great products for free.

But there may be a downside to having just one company controlling nearly everything we see and do on the Internet.

"It quashes innovation and choice for consumers," Swisher said. "You get this sort of company where everybody has to dance to its tune and its decision making, and that's a troublesome situation for anyone interested in a competitive landscape."

Don't forget that people were once saying the same kinds of things about Microsoft. Back then, Google was just a couple of guys with a good idea.