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Yes, I know, they do compete in many many endeavors but each company has successfully carved out their own niche.

Google’s future is in media distribution and advertising. This is obvious through recent acquisitions (YouTube) and R&D spending (Dark Fiber Purchases). They are building the infrastructure for the next generation of media and content distribution. Why? Well they currently own the next generation advertising landscape and if they control the distribution of information they can wrap their advertising package around it.

In this way they can monetize the same content twice. For instance, CBS will pay Google to distribute Survivor via YouTube. That’s the first revenue stream. Next, Google will wrap that in classic AdSense ads as well as their burgeoning video advertising intentions. And that’s the second revenue stream. They have disintermediated a future market - which is genius.

Of course while writing this I read Yahoo is to acquire AdInterax, which provides technology for advertising in rich media distribution channels. Yahoo has also been maintaining their own advertising network. One may consider this a direct competition to Google’s behemoth advertising network. I disagree. Yahoo’s expenditures in the advertising arena are to support its own content creation giving them the ability to monetize on their main focus - content creation.

Content creation is Yahoo’s focus, whether it be content created by the community through social networks (delicious, flickr, facebook potentially) or content produced by Yahoo and its affiliates. The recent Current TV - Yahoo deal is a great example. Yahoo also has successful portals, Yahoo 360, Yahoo Answers, etc - all content based applications.

Okay so how about Microsoft? They seem to get their hands in about everything but what is their core business? Granted they have their cash cows such as MS Office and their Windows Server platform. But what are they banking on? Integration and content delivery.

Sure Microsoft has been trying to enter different segments of the web including social networking and video or the new Windows Live platform. Microsoft’s future is providing the platform for the distribution and dissemination of information. They seek to own the living room. Your Windows Mobile phone and your Zune complement your XBOX 360 and Vista Media Center. Your content is everywhere and access to information is easy.

Okay so I realize there are secondary competitions going on with these three companies - like they all maintain video sites. They all have advertising networks. They all have email and instant messaging tools. Google and Microsoft will soon be competing for productivity platforms (office suites). Etc, Etc, Etc…

All these services for which GYM competes are secondary markets for them to support their core businesses. And at their core they do not compete.

Let’s Review:

1. Yahoo! - Content Creation
2. Google - Content Distribution
3. Microsoft - Content Delivery

What do you think?

Tags: Internet, Yahoo, Microsoft, Google, Business, Competition

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