Transactions: Time to Gear up for a MicroHoo! Partner Program?

Mcrosoft's blockbuster offer to acquire Yahoo! Inc. is, by all accounts, an attempt to knock Google Inc. from its perch as the dominant company in consumer search and online advertising.

Should the February takeover bid -- which Yahoo!'s board rejected -- ultimately succeeded, analysts see few immediate opportunities for Microsoft partners.

"I don't foresee any massive channel implications in the near term," says Darren Bibby, program manager for software sales channels with research firm IDC, adding that "Yahoo! may give Microsoft more arrows in its Software as a Service [SaaS] quiver" against Google in a few years.

Google, with its appliance, and Microsoft, with its QuickStart for Search, have competing channels on enterprise search, a much smaller market adjacent to consumer search. But Yahoo! hasn't tried to build a channel to compete in that market. Tiffani Bova, a research director with Gartner Inc., says that while that battle is over search, the heart of the enterprise search value proposition is data management, and Yahoo! doesn't improve Microsoft's position in that regard. "It's less about search and it's more about data management, using information more intelligently," Bova says.

Paul DeGroot, an analyst with research firm Directions on Microsoft and a Redmond Channel Partner columnist, says that for Microsoft to beat Google in the brewing battle over SaaS, the company must enlist the help of its partners.

"I'd like to see Microsoft leverage its partners, one of the areas where it's strong," DeGroot says. But he adds that Microsoft hasn't yet found creative ways to use partners in the online advertising market. For example, the company's current efforts involve asking partners to sell advertising, a task that lies outside most partners' core capabilities.

"There's a lot of potential here," he continues. "But if Microsoft hasn't explored it so far, buying Yahoo! isn't going to help."

The way DeGroot sees it, the deal might even negatively affect partners in the short run."If anything, integrating Yahoo! is going to be a monstrous absorption problem," he says. For that reason, "there might be as much danger to the channel here as there is potential. Microsoft may just be distracted."

About the Author

Scott Bekker is editor in chief of Redmond Channel Partner magazine.


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