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Microsoft Faces Big Hurdles in Bid to Topple Google

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Microsoft Faces Big Hurdles in Bid to Topple Google


Microsoft Faces Big Hurdles in Bid to Topple Google

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  • <iframe src="" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
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This WEEKEND EDITION from NPR News. I'm Scott Simon.

Yahoo's board of directors say they're reviewing a $44 billion bid from Microsoft to buy their company. Microsoft's been quietly trying to acquire Yahoo for at least a year in an attempt to become a more formidable challenger to Google. But as NPR's Laura Sydell reports, even a combined Microsoft and Yahoo will have a hard time overtaking this nation's dominant search engine.

LAURA SYDELL: When it comes to search and the ad revenue related to it, Google is number one, hands down.

MR. DAVID SMITH (Analyst): Google has become a verb. People think they're going to go Google something, and it's become just basically part of the lexicon of the way people talk and act today.

SYDELL: David Smith is an analyst at the research company Gartner. Google now has around 60 percent of the search market, and its share is growing. Yahoo is a distant second, with about 16 percent. Smith says Microsoft can't seem to get much more than 4 percent of that market, so they're buying it.

Mr. SMITH: They had to make a big change and make a big investment and basically buy a large amount of market share.

SYDELL: Yes, a combined Yahoo and Microsoft will indeed be bigger in size, and their combined resources are likely to make them a more formidable foe to Google. But Professor Jeff Jarvis at the City University of New York, who follows new media, thinks Google is going to keep on taking market share away from Microsoft and Yahoo. He says that's because Google puts its ads up wherever users go, whereas Yahoo is still set up like an old-time Web portal. Users must go to them.

Professor JEFF JARVIS (City University of New York): Google is built for trying to make sense of the entire world, whereas Yahoo is built in trying to get us to come to it and see what it wants to show us, like an old media company.

SYDELL: But the habits of Internet users change fast. In recent years they've have been drifting from one site to the next. Analyst Rob Enderle thinks that's changing. Once again, users going to Web sites and sticking around.

Mr. ROB ENDERLE (Analyst): Be it Amazon for shopping or Facebook for social networking, people go into that and they kind of stay in that environment. So it looks like the market has stepped back a little bit from the Google phase.

SYDELL: Microsoft has already purchased an interest in Facebook. Yahoo remains the most popular Web portal and owns the trendy photo site Flickr. Still, Yahoo is struggling and about to make layoffs. And Microsoft's search engine has just never really taken off. Enderle believes a combination of the two could just be a problem sandwich.

Mr. ENDERLE: And then it comes together and all we do is get an accumulation of both companies' problems, it's not going be a good ending.

SYDELL: The potential merger is also likely to face scrutiny from anti-trust regulators in the U.S. and Europe, and that could hold up the merger for at least a year. Meanwhile, Google is likely to continue to dominate.

Laura Sydell, NPR News, San Francisco.

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