Microsoft offers to buy Yahoo

[alpha_dk]

eab said:
Christ, this is going to har far reaching bloody consequences. The market up for grabs had potential to be the largest and most important market in the world in a few decades (whoever controls computer software, internet apps, and websites will have immense power).

Right now with 3 big players and countless small ones (that Google and MS are gobbling up daily) things are okay. Once MS buys Yahoo there is no longer a 3 way standstill, there will be be two direct giants both fighting for more market share of their own key markets, of their competitors key markets, and of more and more unexplored markets. Google entering cell phone service is just the beginning. I'm willing to bet my DS that in 15 years Google and MS will have their hands in more markets then G.E.

 I agree with a lot of what you are saying, but I have a few differences of opinion.  However, I disagree that there is currently a 3-way standstill.  Currently, there is Google with 65-80% of the market, depending on whose statistics you use, and MS and Yahoo combining a generous estimated 35%, with most estimates around of less than 20% combined.  Really, there is just the one giant (Google), and a bunch of people that see the money they are raking in and want a piece for themselves. 

 Also, Google doesn't necessarily want to enter the cell phone service market.  They just want to ensure open access for their phones on any market.  Building a cellular infrastructure is expensive (ask Sprint's WiMax division), and Google would rather just piggyback on another company's network.  That's why they set aside the minimum bid for the C block of spectrum to hit the reserve price and ensure open access, which was hit yesterday.  Now Google has what they want out of the auction; they may use that money to get other blocks of the spectrum up to the reserve prices to ensure that all nationwide blocks have open access, or they might not... we can't know their bidding strategy due to federal law, but you can be sure they don't want to actually build the infrastructure.  It's not high enough margin compared to their normal endeavors