Both
WSJ and
NYT ran a piece on this story. Given that Google has a commanding lead over both of them combined, this seems like a logical move. In a market characterized by network effects, once the momentum builds it becomes unstoppable. If this move materializes, they have a shot at stemming the tide. The move, however, is fraught with pitfalls. Would their platforms get integrated into one? Panama is gaining traction and Yahoo! may not be willing to abandon it and operating two separate platforms is not smart. What about being part of a highly diversified software company? Microsoft's attention may be dissipated across several products, while Yahoo! is dedicated to Panama. Google's lead is defended by its ability to innovate and provide new products. Can Yahoo! and Google get its innovation engine cranking? Finally, these two companies are reported to have very different cultures. Can the combined entity have a uniform focus and the ability to execute?