Today, Microsoft announced that they’ve just bought aQuantive for $6.0 billion in cash.

It’s the biggest acquisition that Microsoft has ever done in its history. It’s funny because Google has challenged Microsoft when they bought Youtube for more than $1.5 billion and DoubleClick for more than $3.0 billion.

I think that Microsoft has just responded with $6.0 billion. :)

Those two companies are crazy. They’re having a tremendous fight. It’s very interesting to watch.

I was gonna forget to tell you that aQuantive is a digital marketing company…

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Everyone would like to be rich (I presume). Everyone would like to be sucessful (I presume again). Everyone would like to have an ingenious idea to make a lot money quickly. Those two guys at Google did it.

One month ago, an interesting article from ReadWriteWeb talked about the Google model to make money.

You will see two charts describing how it works in the “physical” world compared to the “online” world depending on the demand on the market.

ReadWriteWeb tells us that Starbucks Coffee is the equivalent of Google in the physical world. It means that they’re making good money but it’s funny when you look at the differences:

• Starbucks spends money on expansion, but Google ads spread themselves
• Starbucks spends a lot of money on maintenance, Google spends little
• Starbucks spends money on marketing, but businesses flock to Google because it just works
• Starbucks relies on people, Google relies on software

Those four points are so relevant.

I take advantages of this article to give you the financial results for the Q1 2007 of the Internet Giants:

• Google with a net income of $1.0 billion
• Microsoft with a et income of $3.48 billion
• Yahoo with a et income of $142 million
• Apple with a et income of $1.0 billion

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For Apple, it’s a record when for Yahoo is a clear decrease. Is Microsoft gonna merge with Yahoo ? Steve Ballmer doesn’t rule out the idea… We will talk about it !

Stay tuned

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Yes, it’s not a joke. Google has just bought DoubleClick.

“DoubleClick provides a suite of products that enables agencies, advertisers, and publishers to work efficiently, that will enable Google to extend our ad network and develop deeper relationships with our partners.” (from Google blog)

One more time, Google has beaten Microsoft for this bid. They spent almost twice more than for the acquisition of YouTube last year ($1.65 billion).

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I totally agree with Ionut from Google Operating System: “The major Internet player outbid by Google was Microsoft and that was probably the explanation for this huge value paid by Google for the largest and most ungoogly acquisition ever made.”

Viacom has recently sued YouTube and Google for “massive intentional copyright infringement of Viacom’s entertainment properties” and seeks more than $1 billion in damages! Indeed, like on Dailymotion, everybody can watch on YouTube copyrighted video of Viacom such as: The Colbert Report, SouthPark, An inconvenient Truth, The daily Show with Jon Stewards…

The legal aspects

Just a reminder: YouTube is protected under the American Digital Millennium Copyright Act (ADMC) of 1998 which has a safe-harbor provision. Indeed, YouTube has to block access to materials once they are notified by copyright holders of specific infringement. Thus, YouTube can not be sued for copyright infringement if they respect this principle; in other words, Google has no duty to monitor its content and the firm is protected from the consequences of its users’ actions. However, Viacom blames YouTube for directly profiting from the availability of popular infringing videos and this point is the main issue of complaint because the safe-harbor is no longer applicable in case of profitability of this video broadcasting. Thus, the outcome of this complaint will be interesting insofar as it will condition the future of video broadcasting via the Internet and the future of Video Platform such as Dailymotion, YouTube, etc.

Google’s Strategy

To anticipate and avoid this kind of complaint, the current strategy of Google is to make contracts with traditional content providers (BBC, NBC, etc) which allow them to provide the content they want and to share advertising incomes with Google. But In exchange, they can not sue YouTube for copyright infringement. We will discuss of this strategy again because its success could have a big impact of this market.

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iFilm…

At last, we wonder about the real intent of Viacom. Indeed, iFilm, a Viacom-owned video sharing website also relies on the provisions of the DMCA and meet the same copyright’s issues as YouTube. Thus, if YouTube is violating the law, so is iFilm!

Net Neutrality is at the core of the Internet Battle and will be one of the main aspects of the trade war which we will follow through this blog. To sum up, Net Neutrality refers to the current principle that Internet should be neutral which means Internet users should have the choice in what content they view and what applications they use on the internet.

As the SavetheInternet.com Coalition explains it in the video on the left, American’s main cable and telephone companies such as AT&T, Verizon or Comcast want to charge Internet companies for quality-of-service (QoS); in other words they want to tax content providers to guarantee faster delivery of their data. For example, last year, Verizon’s CEO argued that Google should have to pay for bandwidth. However, even if they pretend to do it in a non-discriminatory way, their main strategy is to discriminate in favor of their own search engines, Internet phone services, etc by blocking or slowing down their competitors. Paul Kaputska notes in his blog that the message of telecommunication companies is “Google is bad, and wants to control the Internet to keep its cash pile growing. Telcos, meanwhile, just want to innovate, so please don’t write laws keeping them from doing so.”. However, beyond this trade war is the issue of the Public Interest.

Google and Microsoft common position

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Even if Google was recently at the center of a buzz which alleges that Google was backing off its full commitment to Net Neutrality legislation, rumor that has been refuted 4 days ago, Google, Microsoft, Amazon, eBay, InterActive Corp., Microsoft and Yahoo! are the principle supporters of Net Neutrality among the leading high-tech companies and they try to influence the FCC to adopt a Net Neutrality Law. Via this blog, we will follow this issue and its economical and technical consequences.