At long last, we have resolution: Microsoft will not, despite the efforts of activist financier Carl Icahn, be taking over Yahoo and going toe-to-toe with mighty Google in the brave new realm of search-based Web advertising. Instead, Yahoo, the definitive Web 1.0 company, will be casting its lot with ... Google, the definitive Web 2.0 company. Microsoft, the definitive Web 0.0 company -- the pre-Web leviathan, plying the increasingly dreary straits of operating systems and software -- is out in the cold.
This drama has been playing out since the mid-'90s, when the Internet first established itself as a business environment and as a compelling counterpoint to the era of Microsoft, which thanks to its monopoly on the operating system for PCs -- the mighty MS-DOS -- had dominated the dawn of personal computing.
Google and its emerging monopoly on search-based Web advertising is the new name of the game. And now that Microsoft is almost categorically excluded from that competition, we are witnessing the final days of Web 1.0. It may look as though Yahoo has somehow saved itself by rebuffing Microsoft and teaming up with the dark lords of Mountain View. But this is not the case. Microsoft will survive. Google will dominate. Yahoo is toast.
Web 1.0, whose heyday ran from about 1994 to the tech crash in 2000, was defined by a highly idealistic set of values and summarized by the "portal" that Yahoo created. For starters, Microsoft was the enemy. Everything about its rapacious culture of profitable emulation, as opposed to plucky innovation, was to be despised. To its credit, however, Microsoft realized that it had been an utter failure at the Web 1.0 game. And now, in the uncertain realm of Web 2.0, Microsoft has in Google a legitimate challenger for dominance of the techscape.
Google has set the tone for Web 2.0, and the tone is grim and thuggish. Microsoft, when it was the enemy, was at least an easy target: so corporate, so stiff, so slow on the uptake. So guilty about its inability to get down with the cool crowd. Google could care less about being cool, as long as it stays a juggernaut. It's guilt-free. It's like the Borg, the cybernetic aliens of "Star Trek." It's been said before, but I'll say it again: Resistance is futile.
Initially, Microsoft believed that by acquiring Yahoo, it could obtain enough search and advertising moxie to do battle with Google. That sounded nice. But pre-Web and Web 1.0 culture combined is still no match for Web 2.0, which is less about solving problems and offering an outlet for creativity and more about raking in gobs and gobs of money (or controlling the movement of everyone else's gobs and gobs of money).
In Web 2.0, where there are lots and lots of projects afoot but all that really matters is their relationship to the gravity well that is Google, we're seeing the reassertion of the state of nature. It's worth recalling Thomas Hobbes: In Web 2.0, if you don't render unto Google that which is Google's, your life will be solitary, poor, nasty, brutish and short.
Microsoft became the biggest fish in the pre-Web ocean because it was unencumbered by the need to be a hardware company; its business was code, the magic that made the machines run and that allowed people to word-process and manage their balance sheets. Yahoo moved this idea to the Web, engendering a space that was liberated from the need to sell anything but that ordered the chaos, thereby making Web 1.0 attractive to advertisers. Both companies, however, supplied content -- Microsoft in the form of software, and Yahoo in the form of original commentary and other elements, such as horoscopes and aggregated news, surrounding its search engine and free e-mail.
Google, of course, is anti-content. Content is for schmucks. Other people make content. Google yokes its search algorithm to its advertising products -- which are also content-free, involving none of the creative effort that people have traditionally associated with advertising -- and connects marketers to the lurching, undifferentiated Web audience running Microsoft's operating system and ignoring the snazzy display ads that Yahoo runs. Google is the most successful gangster that has ever existed, insisting on its cut, even though everything that makes it Google is supplied by somebody else.
In the end, Yahoo believed that it was better to bond with Google, the big new thing, and continue to flip Microsoft the bird, as it has long done. And so, Yahoo has sealed its doom. Our only hope now, as we spy the gruesome Pax Googleannica of Web 3.0 on the horizon, is that renegade survivors of the Web 1.0 pioneer that took its name from Jonathan Swift's race of barbarians will say, "Enough," and join with their former sworn foe to give hope to those of us who see the Web as something better than a merciless "Matrix"-like monetized quantification of all we do and all we are. That's right, as Yahoo makes its Faustian pact with Google, Microsoft -- Microsoft! -- has finally become the heroic underdog.