Thoughts On The Microsoft/Yahoo! Merger: Joe Russo, ZedX

The proposed merger of Microsoft and Yahoo! did not come as a surprise to the business community given the predominance of Google. Google has been the dominant force in the public access to information. First, with its popular search engine; second, with its “Google Earth” software that allows users to make virtual tours of the earth in 3D, plan trips, and share information about visited places; and lastly, with its purchase of YouTube for online video sharing. Google is the giant in the information world and Microsoft could no longer ignore it. Microsoft has been buying up smaller companies to expand its online portfolio and has eyed Yahoo! for some time.
 
So what does the Microsoft/Yahoo! merger mean for the agricultural community? This question can be better answered in the context of the relentless consolidation of businesses in agriculture. This consolidation can best be seen in mergers of material manufacturers and distributors (dealers) of materials to growers. In the latter example, the recent proposed merger of Agrium and UAP is evidence of the evolution towards an “AgBehemoth.” Just like the information world of Microsoft/Yahoo! and Google, the material (seed, fertilizer, chemical, and equipment) world is breeding its giants. And the cross-section of the two will occur in agriculture. As agriculture gets more integrated, the more attractive it becomes to global information technology (IT) giants like Microsoft/Yahoo! and Google. And given the competitive nature of products in the agricultural industry, the same IT giants are vying not only to be the premier source of information but also to be the best platform for online advertisements.
 
In the not-to-distant future, on the order of two to three years, a hybrid Microsoft/Yahoo! or Google and “AgBehemoth” will create online IT solutions for agricultural suppliers to more effectively monetize their products and services and compete on a global scale. This efficiency will be outdone by IT tools allowing users to ubiquitously and seamlessly access and manipulate geospatial data on a global basis. This user-controlled “mining” of geospatial data into decision products will impact growers, suppliers, bankers, insurers, commodity brokers, hedge fund managers and investors of all types. It will literally reshape both how agriculture is done in the future and by whom.
 
Slightly farther into the future, on the order of five years, decision products will mature into risk management solutions for all facets of the food supply chain from production to consumer. In this “risk-sensitive” world, we will have IT tools to spatially and temporally mine large volumes of data from many complex and disparate sources – ranging from weather forecasts, soil types, seed traits, market pricing, consumer demand, to regulatory requirements. These future tools will determine and likely shape what crop is grown, who will grow it, and where it will be grown — minimizing exposures and maximizing profits. Even the role of government in agriculture will change. As risk management tools become more precise, the nature of government subsidies will likely follow suit.
 
This future vision of the impact of a Microsoft/Yahoo! merger and its ultimate competition with Google will have on agriculture may be a bit aggressive. But who could have imagined just 10 years ago how quickly Internet services, like Yahoo! and Google, would impact the global community.
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