The whole furry of speculation that happened yesterday about Microsoft looking to merge with Yahoo! really got me to thinking. I was happy reading Giga Om's article this morning about the talks being off, if they were even "truly" on to begin with. Yahoo! is much better without Microsoft, however, the same can't be said for Microsoft.
Microsoft is struggling when it comes to search, and this is entirely their own doing. If they can't make up their mind whether they Live Search or are the MSN Search or heck, are they Microsoft Search, why should the users make up their mind to utilize their services? There's so much brand confusion with Microsoft when it comes to search. How in the world can it ever grapple above third and stop its backslide of market share, if users can identify who Microsoft is when it comes to search? That's what makes Yahoo! so appealing to Microsoft.
Yahoo! on the other hand, knows who it is, what it brand means and that it serves an entirely different type of user than most of it's competition - especially Google. Yahoo! sets itself apart from Google, and Microsoft as the "comfortable alternative." I even see this as intentionally subliminal on Yahoo!'s part. From the Yahoo! toolbar to the integration of all it's features - from search to pictured & email, Yahoo! makes it easy.
There's nothing easy about Microsoft, nothing at all. From its software reputation (lets face it, people love to hate Microsoft), to its inability to decide whether it really wants to promote Ms. Dewey (they put her back into the closet after the SES Keynote) or drop her, their clear lack of identity when it comes to search and continual PR blunders, Microsoft leaves a lot to be desired these days for companies they are courting.
If I were Yahoo! and DoubleClick I'd rebuff Microsoft, too. Until Microsoft truly can understand and demonstrate to its audience that they know who they are in search, they'll never be able to earn the respect, create the desire, or gain back there market share.