Microsoft said that they made an acquisition offer to Yahoo, and Yahoo is willing to consider the option. Of course, Microsoft is hoping to beat Google by working with Yahoo as Microsoft’s CEO, Steve Ballmer said, “We can offer an increasingly exciting set of solutions for consumers, publishers, and advertisers while becoming better positioned to compete in the online-services market”.

Sure, MSN would love to get their hands on Yahoo users and advertisers, but just by combining two companies, would they become #1? I think not. Regardless of who you are or what business you are in, you need to know what you are doing wrong and why, what works for you, and what’s not. Most importantly, you need to know why your competitor(s) is doing better. Without knowing your strength and weakness, and that of competitor’s, the chances are, you’d make the same mistake again and again. Also, it’s important to know who you are, and what people (users, customers, etc.) think who you are. I think of Google as “search engine that offers other cool services”. I think of MSN and Yahoo as “portal sites with search function”. I hope if and when they merge, they’d further improve what’s working well for them, and come out as a brand new search power service.

Yahoo is doing well outside North America and Western Europe. In Asia, local search engines (Naver in Korea and Baidu in China) are doing far better than Google, Yahoo and MSN. Why is that? Maybe the key to success is not becoming bigger, but thinking smaller… instead of providing the one-slap service to everyone, give it a room to offer some unique services to each market.