the Vernon Journal

Serving the Kingdom in Southeast Asia


O.K. so the title is nondescript and overly cutesy, but I'm afraid this is the question our children (or if not, our grandchildren) will be asking us when we begin to reminisce about the Web2.0 days.

Yahoo has done some good things lately. Flickr! is, still, a spectacular and innovative site. The new Yahoo! Mail (beta) is the best application for internet mail available. But these good things aren't enough.

There are 1.65 billion reasons that Yahoo is finished: DealBook - Google to Buy YouTube for $1.65 Billion in Stock - New York Times

The Internet search giant Google said Monday that it would buy YouTube, a video-sharing Web site that officially began operating less than a year ago, for $1.65 billion in stock. Both companies have approved the transaction, which is expected to close in the fourth quarter of 2006, Google said.

Google already had a video service which was in some ways superior to YouTube (higher video quality, better parental controls) but it has failed to gain a significant market presence. In the wings Yahoo has been developing a "Flickr! of Video" to try to compete with the popularity of YouTube. Google saw this and they moved in purchasing YouTube.

This is a new strategy for Google, who to this point has only made small acquisitions which complement its products. The strategy of: "if you can't beat 'em, buy 'em" is not unfamiliar in the cutthroat computer industry, but it is the first time Google has played this little game. Goodbye Microsoft, there's a new bully in town.

As for Yahoo? Well unless something drastic happens..
Think Excite.
Think Infoseek.
Think Lycos.
Yahoo will join the ranks of these once famous names. It might take 10 more years, but Google has just put the writing is on the wall.

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