Pro's and Con's of Mergers

How big is too big?

Is it okay for one company to dominate an industry?

Why does Google dominate the internet search business?

What happened to Yahoo! and what will become of them in the future?

Mergers are nothing new. They date back to Old Testament times when marriage was more than a union of man and woman, it was the joining of families, tribes, and these relationships are basically what we see going on today.

So why merge?

It could be to pool resources, to eliminate duplication, to allow collaboration.

It could be to wipe out the competition, to capture more of the marketplace.

Bigger companies often have more money for R & D. Bigger companies often have more overhead to manage and pay for.

My group of radio stations was out of balance for several years. The past 18 months, we have been able to get the teeter totter to balance out. Part of that involved selling off a couple stations in such a way that the new owners did not compete directly with our remaining stations. We called it "pruning". We did the same with our staff. Budgets now balance. It's good to be "right sized". Those that were let go were not earning their keep and it was obvious when you look at the numbers.

Now what about Google? In a special report from Mediaweek, here's what they have to say:

If you were to google the phrase "Google dominates," you would be greeted by at least 24,000 different links, while "Google dominates search" would yield some 1,400 results. Clearly, Google's supremacy is a hot topic.

Despite vigorous competition from formidable search players like Microsoft and Yahoo as well as also-rans like Ask.com, Google's market share—namely, its percentage of total Web searches—continues to balloon. In the last three years, Google's share has climbed from 43 percent to a decisive 56 percent, per Nielsen Online. (READ MORE)


Note that "google" is a verb that means "to search for on the internet". Just like "Kleenex" is the term the public uses instead of a "facial tissue".

And here's a story on Microsoft taking over Yahoo! and what it means to to advertising world:

Some have questioned whether Microsoft's proposed $44.6 billion acquisition of Yahoo! would have a positive impact on the advertising industry. The concern is the deal is only about the big getting bigger.

Yet according to Yusuf Mehdi, senior vp of strategic partnerships at Microsoft, scale is key to the deal. In an interview late Wednesday afternoon, he laid out the case for why the ad industry needs a bigger Microsoft. (READ MORE)

Sphere: Related Content