Microsoft moves to check upstart rival

No sooner does Google fail to deliver with dismal results - its overall growth of paid clicks slowed to 30 per cent, half the 61 per cent it enjoyed in the same quarter in 2006 - than the Seattle monster rears its head with what could prove to be a mortal blow.

The shock is that it is Microsoft making the play and not Rupert Murdoch, a long suitor of Yahoo. Last year, he was mooting swapping MySpace for a 25 per cent stake in the ailing search engine company. That seemed like a smart marriage but it never happened.

For Microsoft, the move is doubly sweet. For ages, Bill Gates and his cohorts have been raging against Google, complaining the double-click company is anti-competitive. While their fury at the upstart's incredible growth only made industry insiders smile - after all, if anyone knows about monopolistic behaviour it is Microsoft - there was no doubting their seriousness.

They tried to buy Yahoo but those attempts were rebuffed. Now, they're having another go and on this occasion, Yahoo is seriously weakened. Only this week, it scaled back revenue forecasts, warning of "headwinds" - severe pressure coming from more than one front. In the 10 years since it was one of the world's most popular websites, Yahoo has been declining. But in recent months, that fall has started to represent a tail-spin.

A strategy that saw it attempt to be all-singing and all-dancing but not actually doing anything especially well, saw it weakened by Google and the new social networking sites (Yahoo has just closed its social networking and music download services). Also, Google and Microsoft made their sites preferable to web advertisers (Yahoo's new platform called Panama, has been delayed).

Yahoo still has its search engine and that's what Microsoft is after. It may be aiming for Yahoo but make no mistake, its real target is Google.