Apple is going to buy Yahoo! At least that’s what I tweeted earlier this month and tried to convince smart guys Dan Wallace and Tim Elliott Wednesday night after a few glasses of wine. BusinessWeek this week reported that Microsoft and Yahoo! are in talks to make Bing the default search engine on the iPhone. My take is Yahoo! would be a better fit for Apple because it competes with Cupertino on fewer levels than Microsoft.
Add to that all the rumors swirling around next week’s Apple product announcement. Assume for a second Apple releases a tablet and that, technologically, it’s an absolute knock out (that would require at least solving the battery life and user interface questions). In order for the tablet to succeed it also needs content, just as the iPod never succeeded until the iTunes Store was born. Yahoo! is essentially already a content company, one that has contracts with many other content companies. Google recently pulled Associated Press content from Google News. What if Yahoo! (i.e. Apple) became the exclusive online portal to AP content? There are already rumors Apple has worked out a deal with The New York Times, albeit not an exclusive one.
Some people say Apple is a technology company. But that discounts the fact that they’re already the largest music retailer in the country.
And then there’s advertising. Apple’s recent purchase of Quattro Wireless shows the company knows it needs to have a holistic approach to wireless, but it’s going to take more than some herbal healers for Apple to really compete against Google and AdMob. In might just take Apple getting into the search ad business in a big way; buying Yahoo! and it’s ad network would certainly be one way to do that.
Last but not least among the reasons the two companies are a good fit is the cloud. Apple has been struggling in cloud computing for a long time. When it relaunched the stagnant .Mac service as MobileMe it was with many hitches, and a year and a half later MobileMe still underwhelms. Google’s numerous cloud offerings all serve as additional points of advertising presence. Apple’s best bet could be to buy Yahoo!’s data centers and network infrastructure knowhow if it want to compete seriously in the cloud.
Nick Bilton at the Bits blog just put together this great chart showing where Apple, Google, Microsoft and Yahoo! compete. Are you thinking what I’m thinking, Nick?
