In ye olde days, Google was always analysed in relation to Yahoo, MSN and AOL. What these companies had in common was a chance to redefine the Internet, as opposed to serving routine web content like of Tiscali and Orange do; and the idea that they all had similar advertising revenues or the potential for similar advertising revenues. Eventually, AOL dropped off that list, especially here in the UK where their acquisition by Carphone Warehouse aligned them more closely with the latter type of website. Now, Yahoo's rather bizarre relocation away from the UK (bizarre because come on, how many US companies manage their UK operations from a country not even in the EU), although not marking a formal exit, does mean that they won't be undertaking any radical strategies in the UK. A possible Microsoft acquisition may relocate them back, but MSN UK has faded as a serious competitor to Google UK, if it ever was that. This leaves Google as the only one of the original foursome still trying to be innovative and create market changing services - largely from the US but that is nonetheless more than their erstwhile competitors will do.
That leaves Google competing with the real world media companies, with whom Google has always fought for the same budgets but less clearly so when Yahoo was around and when MSN was touted as a real alternative (and when media companies were not so aware that they would lose revenues to Google). Until Google changes the market, the online spend of small and medium businesses will largely be on text-based advertising, given that display advertising require time, money and design effort that such businesses do not have). For a small business, the choice is often AdWords or newspaper listings or yellow pages listings. Google isn't targeting these media companies out of any personal vendetta, but they just happen to be the next layer of revenues. Regional newspapers (who recognise Google as a competitor but also as their primary source of traffic), classifieds and directory companies (who recognise Google as a competitor but are limited by their smaller and often declining budgets) and advertising agencies (who do not recognise Google as a competitor).
While media companies have little interest in some of Google's business areas (their document or health strategy, for example), Google, regional newspapers, classifieds websites and directory companies all want local, text-based advertising from small and medium advertisers. In the US, the battle between Google and Microsoft, and to a much lesser extent Yahoo, is still on (this is one reason why Kara Swisher's suggestion that Microsoft should buy Yahoo is not good - the game Microsoft US should win is the "change the Internet" game, not the "be an online magazine" game). But in the UK, when Google does something, the more relevant question to ask now is how will it affect these three categories of media companies.
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