Insightful analysis and commentary for the US and global equity investor
Contributors: Douglas McIntyre Jon C. Ogg

Previous Posts

Monday, October 16, 2006

Yahoo!: Why Panama Doesn’t Matter, Lessons From PayPal (GOOG)(YHOO)(EBAY)(MSFT)(IACI)

For those who were concerned when Yahoo! missed its date for the new Panama search and advertising platform, forget about it.

Several company’s, most notably IAC’s, say that their search technology is better than Google’s, and they get a few points of shares in the search market when the number come out each month. At most.

Panama my be good, but Google is good enough. Internet users who use search have given Google about 50% of the market, leaving Yahoo! and MSN as a distant No.2 and No.3.

Habits are hard to change. Even if Yahoo! Panama delivers slightly better results for advertisers and searchers, there will be no whole scale migration to the product. Among other things, Wall St. and the business press have left Yahoo! for dead. Techies don’t like to do business with companies that are warding off buzzards. Bad public image may not equate with bad technology, but it’s close.

Google has tried to get into the only payment business. The company undoubtedly put a lot of money and R&D into Google Check Out and priced it to compete with the dominant Ebay Pay Pal system.

The PayPal lead appears to be too great even for Google to crack. Time will tell, but there does not appear to be a migration away from the Ebay online payment system.

Even if Panama has hit its May launch date, it is questionable that it would have made a difference for Yahoo! in its competition with Google. But, coming even later to the game, it is not likely to help Yahoo! at all.

Douglas A. McInyre can be reached at He does not own securities in companies that he writes about.

Powered by Blogger