Just finished reading some speculation and rumors floating around at Mashable.com and Telegraph.co.uk regarding a possible takeover of social networking site Bebo.com by Yahoo!.  It’s not coming cheap either.  Yahoo is reported to be in discussing a $1 billion acquisition.  Telegraph.co.uk reports that Bebo has an estimated 25 million users worldwide, compared with MySpace.com’s 100 million users.  Yahoo! has attempted to buy its way into the social networking scene before when they offered a large amount of money for Facebook.com, only to have their offer rejected.

Why would you care?  What would Yahoo! want Bebo? Mashable suggests:

Why would Yahoo buy Bebo? Possibly because without MySpace, Facebook or YouTube, they don’t have a major stake in the social networking realm. Flickr is fairly big, and they have lots of smaller social sites, but nothing generic that lets them integrate all their other services.

The big three, Yahoo! / MSN / Google, are all about expanding their empire as far as possible.  Increasing their piece of the search market (multi-million dollar ad campaigns).  Buying advertising and marketing firms (DoubleClick and aQuantive being purchased for billion dollar figures).  Acquiring social networking sites where users congregate (Youtube purchased for $1.65 billion).  I’m surprised it wasn’t MSN or Yahooo that bought Myspace.  I wonder if MSN will come in with the big dollars to buy Facebook?

While discussing a vertical search idea with someone, I couldn’t resist thinking about how the idea may be doomed to second-tier success. Before it even began.

No one will topple Google in the search space for the same reason that no one will topple Microsoft in the personal computing space. There was a time when they didn’t have a strangle hold on the market. A time when a competitor had a chance to take a significant slice of the pie. That time has come and gone. Even a company with the money and resources like Microsoft and Yahoo can’t compete with Google in its current state. They own the market and everyone else is playing catch up.

How do you compete with a company when their service has become so popular it is a verb? People don’t search, they google. How do you compete with a company when users don’t even choose their service, they just associate it with the task on a subconscious  level? I find myself doing this. I want to search for something but I don’t think about what site to go to. I don’t even consider going to Yahoo, MSN, or Ask. I just go to Google and start searching.

Is Google’s search engine superior to that of Ask, Yahoo, or MSN? Maybe MSN. But Yahoo and Ask have results that are quite similar. In some cases Google’s results are even spammier due to every spammer in the world aspiring to be number one in the Big G.

They don’t offer features that Yahoo doesn’t. They don’t have key partnerships that Yahoo doesn’t. Yet Yahoo, and all other search engines, are stuck on catch-up mode.

This is partly why I was initially excited to hear about the possibility of a Yahoo / MSN merger. If they can’t compete with Google on their own, would they have a better chance of competing if they combined resources and market share? I know there are many who are skeptical and I also have my doubts. Especially since I also recently went through a merger and I’ve seen first hand the issues and problems that can arise when two companies are thrown into the ring and asked to work together. That said, wouldn’t working against a common enemy unite them? I don’t know….but someone needs to step up and give them a run for their money.