FTC says search engine alliance doesn’t breach anti-monopoly law
Google owns the search engine market in North America and most of the English-speaking world. It’s strong on the continent of Europe. Here in Japan, however, it’s still second (and spaced back a ways) to Yahoo Japan (note: Yahoo Japan is a separate organization from Yahoo US, although they started out together). In PRC China, Google is getting strangled by Baidu and the CCP– but that’s another day’s story.
I’ve always marveled at Yahoo Japan’s ability to stay on top of the game. I’ve noticed most Japanese use Yahoo for their homepage, and the mix of news, sports, weather and search make a nice jumping off place (standard portal stuff). Culturally, I can only guess as to why this is the case:
- Did the Japanese embrace the web right at the peak of Yahoo’s power, who simply lucked into first place?
- Do Japanese prefer clicking through to finding something instead of text searching for it? (yes)
- Did the blank white abyss of Google’s homepage just not gel with the Japanese? (likely– behold the Japanese hatred of whitespace in advertising sometime)
- Did Japanese cell-phone internet access initially skew them toward Yahoo? (also yes– it’s been called the “galapogos effect“)
One other smart play that Yahoo Japan did a long time ago was to launch Yahoo BB, a broadband service launched in 2001 by the communications pioneer Son Masayoshi. This likely cemented the brand for many Japanese. Just as the Internet meant AOL for many Americans in the mid- to late-90s, the Internet meant Yahoo for Japanese quickly adopting broadband.
But what happens when the dominant portal cannot get a quality search engine from the US partner anymore? Develop one in-house? [That's what the Chinese are trying-- and it's an expensive venture, made possible only by the cheap labour and lavish government funding provided by Beijing.] No, too expensive. It’s better to go shopping, but which engine to get?
The Google search engine is the clear leader– everyone knows that (even Japanese users– they simply stay on Yahoo because it’s their default homepage). The Bing engine may have been a better deal, but likely came with too many strings attached. Overall, IMHO, this deal seems to be a good idea for both partners: Yahoo gets a quality search engine and can continue to concentrate on it’s portal offerings (news, email, shopping, etc.), while Google finally gets enough penetration in the AdWords market here.

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