How to Compete

Google (GOOG) seems to be forcing competition to step-up to the plate or get left behind. Today's news of Microsoft entering into talks with Yahoo (YHOO) for a possible merger-like agreement appears to be Microsoft's (MSFT) way of stepping up to the plate in order to compete against Google. $50 billion is the amount being tossed around. Though it presents itself as a means toward keeping up with Google, it "won't address Google's superior technology for determining the most relevant Web pages and search results. Both Yahoo and Microsoft's ad-serving technologies simply don't measure up, say analysts."
"Here are two companies that are having difficulties at the same thing," said Scott Kessler of Standard & Poor's. "With a merger, you get one company still having difficulties at doing that same thing."