Decker Quote on Yahoo!/Google Deal Failure

(As usual, I do not speak for Yahoo!)

Sue Decker:

Yahoo! continually optimizes its algorithmic and sponsored search, and we have, in 2008 alone, developed and launched hundreds of improvements all designed to enhance search quality…

“Hundreds of improvements” is always a bad sign: it implies that: a) the original design was poor; or b) each improvement is a rapid response to a corner case, which in turn weakens the overall structure; or both. Painting over cracks does not eliminate the cracks; it only makes it more surprising when everything collapses.

Ultimately, this decision will be the end of Yahoo! as an independent entity. The Justice Department’s tacit anti-trust policy for the last eight years has been one of establishing lopsided duopolies. Internally, the JD assumed (incorrectly) that Microsoft was the only US business that could keep Google in check. As long as Ballmer remains in charge, Microsoft cannot even keep itself in check.

Selling to Microsoft is not the only option open to Jerry Yang et al. If he were really courageous, he could try to greenmail the Justice Department itself: simply state that if the government does not subsidize Yahoo!, Yahoo! will shut down its search operations and tell its users to go to Google. As I have said countless times before: Yahoo! is not in the business of competing with Google; Yahoo! is in the business of making money. Yang has to remind the Justice Department that it is their job, not his, to keep monopolies under control.