Seeing Microsoft walk away from Yahoo made me think of a funny story in John Battelle’s book, The Search. He tells about how Vinod Khosla tried to get Excite to buy Google. (This is in 1997. Excite was a very big deal back then.)
Fortunately for himself, Larry Page had too much vision, and set a price for Google that was way too high. He wanted the sick amount of $1.6 million. (Yes, million with an M. I think he had his eye on a studio apartment in East Menlo Park.)
So, here’s a case where a search company wanted too much for itself. But they were right in the end. The question is if Yahoo, if turning away Microsoft, is also going to be right in the end. Personally, I doubt it.
Here’s how I see it. Google had unique and powerful technology that solved a real problem that lots of people had: how to find stuff on the Internet. They just had to grow that into an empire. (Which they did.) Yahoo has a huge amount of traffic. But that isn’t anything all that special. It’s just traffic. And it will go away when tastes change.
Technology is what creates the winners of the future. Traffic is something that is farmed for money. It’s amazing to me that in 1997, no one saw how valuable the Google technology would become. At the same time, when you think about the big internet players that didn’t have technology (AOL, Netscape, Excite), it makes you wonder if people will be equally amazed at what offer Yahoo walked away from.
