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dannysullivan
05-03-2006, 09:59 AM
The Wall Street Journal has a story (http://online.wsj.com/article/SB114662449016042303.html) out today talking about how Yahoo and Microsoft have discussed merging or partnering to combat Google. We were just talking at SES Toronto about how much sense this makes. I've also posted a long-rundown on the SEW Blog here: Yahoo & Microsoft Have Talked Partnering, Merging (http://blog.searchenginewatch.com/blog/060503-090028). What do you think?

Chris_D
05-03-2006, 10:11 AM
Geez Danny - (wiping coffee off monitor...) next time can you please wait until after I've finished my coffee before you post Thread descriptions like "Yahoo & Microsoft To Combine"....

:)

Does anyone else thank its funny that Y! & MSN want to work together - when they have been working together for the past few years - working together using the same PPC engine (Overture) - but now that Microsoft has started rolling out its own PPC engine (Adcentre) - MS & Y! are thinking that they need to be working together??

Y! & MSN look like a couple walking away from their divorce proceedings, and talking about where they should go on their honeymoon......

vayapues
05-03-2006, 11:14 AM
Heard this on the news this morning. Personally, I think it makes a lot of sense. As Danny pointed out in his blog, they are complementary to each other.

MSN has to do something.

Despite a budget which is almost endless, they continue to fail in the search engine wars. I think a big part of their problem is that MSN means Microsoft, and a lot of people do not care for Microsoft in the same way that they don't care for Wal-mart. Well, that and the fact that their search engine is really not that great.

An acquisition, or partnership of some sort with Yahoo would let them do business under a much more loved brand name, and give them access to better search technology.

David Wallace
05-03-2006, 11:16 AM
That would be huge but I have doubts it would happen. Microsoft may need Yahoo but I don't think Yahoo needs Microsoft by any stretch of the imagination. Sure their PPC toolset is awful but I think that problem is the result of them continuing to patch an old antiquated system. They really need to throw it away and start from scratch, giving advertisers what they have been requesting for years now. I wouldn't think Microsoft would be the solution here - not with their history of producing buggy software.

Personally I don't like Microsoft as a company. (I typically don't like any company that wants to stamp out everyone else.) Sure I use their products (who doesn’t) but would very much like to see someone come out with something better, the Firefox browser for example. So while I like to see competition for Google in the arena of search, I would certainly not want to see Microsoft take the lead.

Webvisitor
05-03-2006, 12:58 PM
I am sticking with my thoughts posted here the other day on a similar thread;

http://forums.searchenginewatch.com/showthread.php?p=78508#post78508

---MSFT could easily buy Yahoo. Yahoo has a market cap of roughly 45 bil. and MSFT has 34 bil. in cash.
Give YHOO a 50 percent premium and you have roughly 67 bil. price tag.
MSFT will not give up all their cash to secure YHOO but they could easily put up 20 bil. and float some stock to secure a deal.
They would approach 30 percent of search and would have enough cash left to outbid Google by giving 100 percent of publisher share on content search.
In a protracted ad bidding war Google would lose.---

davecarberry
05-03-2006, 05:21 PM
Looks like Yahoo and Microsoft needs all the help they can get in Canada. I was amazed that Yahoo had no Search presence at the SES show, or in Canada in general.

g7submit
05-03-2006, 08:09 PM
Zig Ziglar once said these are "...wandering generalities without being meaningful specifics...."

This is not different in my perspective. Is the Overture link between Yahoo and MSN new?

When would Mr Gates throw in the towel and hire experts like Danny and rebuild MSN from scratch? Yes, you Danny S. Everybody has his price. And Bill's got loads of it!

I just wished he could come into this forum read about MSN and compare notes for just three months. That, I believe, will clear all the mucous in the MSN strategy. All these "Live" shows in beta and zeta and theta won't be needed.

In the UK, Marks and Spencer is said to be rebranding to "Your M&S"; this association may be "Your M&Y". Goodluck Ol' Bill :)

shor
05-03-2006, 09:22 PM
Let's face it - it's all about the advertising spend.

Overall globally Google continues to grow market share of searches - which in turn draws advertisers to their huge search volume. If M+Y combined, would they be able to generate a similar volume of searches and thus attract advertisers to a brand new high volume channel? As Chris_D mentioned, MSN had until recently been using Overture/Y!SMS for the past few years - i.e. in effect MSN+Y! traffic has already been a single source for PPC advertisers. The two major points of failure thus far have been lack of traffic volume and an advertiser-unfriendly PPC system.

In Australia the search volume from MSN + Yahoo combined just doesn't compare to Google AU. I 've had tens of thousands of keywords rejected from Y!SMS due to lack of search volume. That is the number 1 reason for our ridiculously Google-centric advertising spend - not enough people using MSN + Y! So how would this be affected by a Y! acquisition? If the merger did eventuate it would seem to be a long term strategy, at least for search. Pull together the best minds from both search products, revamp the SE for relevancy and THEN perhaps they'll have enough searchers to draw in the advertising spend that make G's financial reports look so sexy.

Of course, if you combine their search properties, what would you do with Y!'s market leading social services? :confused:

ewc21
05-04-2006, 12:54 AM
---MSFT could easily buy Yahoo. .---

There have been several times Microsoft appeared reluctant in acquiring other firms and instead tried to build its own. The news sounds exciting but I don't see it happening in the near future.

chubberman
05-04-2006, 12:58 AM
Why is it that Microsoft considers Google a threat? How is it that Google could threaten any of Microsoft's businesses? On the face of it, it just seems like envy.

One of the simplest and most enduring business principles is that you focus on your core competencies. Microsoft's core competency is building OS software and Office apps. They've basically cornered the world market here. How could Google being successful at search threaten Microsoft, which builds and sells software?

Every reason rationalizing Microsoft's aggressive moves in search sound ridiculous. Could Google's dominance in search spell the end of Microsoft on the desktop--gimme a break.

Microsoft can't stand any other tech company being as successful as they are. Whenever I think of the Microsoft/Google "rivalry", I get an image of Bill Gates as a little child screaming that the other kid's ice cream cone is bigger than his.

Nacho
05-04-2006, 01:26 AM
That will be the fast track to demonstrate weakness for both parties towards Google - especially MSN after *trying* to go on their own - to keep trying harder. And even if they do, the consumer still dominates preference for the search technology leader. They will need to much more creative than that.

Is MSFT really that scared?

Marcia
05-04-2006, 01:35 AM
The very thought of them combining is something I find nauseating.

Cristian Mezei
05-04-2006, 01:42 AM
It's not that they want to work together.

You have to read amongst the lines.

It's "Microsoft to buy Yahoo! stock". It sais a lot.

mcanerin
05-04-2006, 02:31 AM
I think it would be far more likely that any kind of connection you would see would be closer to licensing Yahoo's patents (http://patft1.uspto.gov/netacgi/nph-Parser?Sect1=PTO2&Sect2=HITOFF&u=%2Fnetahtml%2FPTO%2Fsearch-adv.htm&r=0&p=1&f=S&l=50&Query=AN%2FYahoo&d=PTXT) or know-how than anything that would result in MSNHoo or whatever...

Ian

VinnyLingham
05-04-2006, 05:37 AM
I believe that the Yahoo/Msn paid model is very different to Google's model and hence the fact that Google's relevancy and financial performance is so much better. Google also derives 42% of it's revenue internationally... something that MSN & Yahoo don't really understand how to do. The strategy of separate marketplaces per country certainly does not harness the power of the Internet's global economy. The real issue is that MSN/Yahoo are myopic in their views of global paid search marketing and unless this changes, even an MSN/Yahoo merger still won't topple Google, IMHO.

Chris_D
05-04-2006, 08:32 AM
It never ceases to amaze me how financial analysts think that when 'competitors' join forces, revenue of company A plus revenue of company B = the direct sum of the two numbers.

Integrating big companies can come at a huge cost.

For example - remember when HP merged with Compaq back in 2002?

On September 4 (2001), HP and Compaq announce a definitive merger agreement to create an $87 billion global technology leader.
http://www.hp.com/hpinfo/abouthp/histnfacts/timeline/hist_00s.html

2003 results $73B
2004 results $79B

Joseph Morin
05-04-2006, 12:37 PM
We were just talking at SES Toronto about how much sense this makes.

Ummm...wow...talk about calling something dead on. When we were discussing this at the hotel bar in Toronto we were talking rather loudly....I wonder if that guy sitting by himself at the end of the bar was from Microsoft!

:confused:

Nacho
05-04-2006, 08:31 PM
For example - remember when HP merged with Compaq back in 2002?
HP+Compaq IMO is not as a compatible merger as it would be with MSFT and Yahoo. Were are talking about two different beasts that coincide in a few business endevors, but definetly not in each of their core business models.

Chris_D
05-04-2006, 08:46 PM
Hi nacho

If you look at the areas of overlap - rather than the areas of difference - and the revenues each company (MSN and Yahoo!) generates from banners and graphics based adserving - a lot of overlapping revenues wouldn't be a straight addition.

Much like Compaq/ HP. Its the areas of overlap in the current business of MSN and Yahoo.

Also, from a global scale - there are joint ventures which can't easily be compatible.....

E.g. in Australia - Yahoo is actually now Yahoo7! (JV between Yahoo and Channel 7 TV) and ninemsn has always been a JV between MS and Channel 9 TV).

Carote
05-05-2006, 02:16 AM
I was wondering if this represents a cross licensing between the two. About 18 months ago I noticed Yahoo was using a new search technique, routing all search selections through a proxy server. For example if you hold your mouse over a search result on Yahoo you see not a link to the web site you want, but a link to Yahoo with some unreadable data. So presumably when you click on the link this goes to Yahoo who then forward the request to the web site you select. The advantage is Yahoo knows which link you selected, and so they know which links are the most popular. They can also determine which link you tried last and guess that link was either the best one or the user gave up at that point.
Recently MSN seems to have started using the same technique, so maybe this using the same algorithm is a prelude to merging. Does anyone know much about this proxy server technique?

g7submit
05-05-2006, 08:40 AM
It's not that they want to work together.

You have to read amongst the lines.

It's "Microsoft to buy Yahoo! stock". It sais a lot.

When a boy starts asking a girl out, is there any secret in it that there is some form of wooing and admiration?

C'mon, who are they kidding? Buy 20% today, increase it with another 20% next day and then gain controlling share! Have you noticed the shared technologies? Do you remember the DaimlerChrysler marriage and how it started?

Having said that, I don't think MSFT is really scared, they just want to be leaders and Ol' Bill doesn't like playing second fiddle to anyone, I am quite sure he's enjoying the whole game - I like him for that - he thrives on competition. Let's just wait to see who's the advertiser's friend.

Have you read this page: http://www.isedb.com/db/blogs/1709/ (http://www.isedb.com/db/blogs/1709/) I see the real child who's spotting the other child's bigger ice cream cone there.

If MSFT wants to squeeze out Google into oblivion, it can. John D. Rockefellar did that with his Standard Oil company (although it later got him in trouble). That will not be good news to the masses. What we really need is good competition and Google has that edge and can be protected by her advertisers and users from being easily overun by another giant. But the real stuff here is that the challenge it posses to "Your M&Y", Can their combined act really beat Google innovations and command loyalty? That's the real question.

When you think of a PC, you think of Windows and MSFT is there, but when you think of Internet Search it's Google. There is some some psychological loyalty there, that's exactly what Ol' Bill wants! :)

kid disco
05-05-2006, 03:07 PM
Microsoft to Spend $1.1 Billion to Catch up with Google (http://www.marketingvox.com/archives/2006/05/05/microsoft_to_spend_11_billion_to_catch_up_with_goo gle/index.php)

CraigM
05-08-2006, 11:03 AM
Microsoft to Spend $1.1 Billion to Catch up with Google (http://www.marketingvox.com/archives/2006/05/05/microsoft_to_spend_11_billion_to_catch_up_with_goo gle/index.php)

Good article.

What is interesting to note here is that all this talk about Yahoo and MSN joining up comes at a time when the contract between Yahoo and MSN is about to expire (regarding the sponsored search feed MSN recieves from Yahoo). In a related article to the above, Ballmer states that they plan to have adCenter up fully by June 30th. Timing just seems a little odd.

I wonder where that $1.1 billion will be "invested"?

jjspirko
05-09-2006, 10:38 AM
About a month ago I wrote an article called, "Could Microsoft Buy Yahoo - Seven Reasons it Could Happen". A few people thought I was blowing smoke, some thought I was just plain wrong and a few though just may be there was something to it. If you would like to read that article it is located here.

http://www.adcentercode.net/could-microsoft-buy-yahoo-seven-reasons-it-could-happen

There were as the title denotes 7 key reasons I felt this was likely but the one that pushed me over the edge was the two companies both buying land in Quincy, Washington at the same time. The reason given was low cost of land but for both to pick this one tiny town at the exact same time and locate just down the road from each other that "reason" seemed lame to me. The way I phrased it on my blog was,

“The fact is either the city of Quincy has one of the best public relations departments in the world that just landed two of the biggest global companies at the same time solely on their ability or the two companies have something going on behind closed doors. You tell me which one seems more likely“.

Will it happen? I am not willing to say 100% yes but has something been going on for a LONG time? That I am sure about,

Jack Spirko

andrewgoodman
05-12-2006, 05:30 PM
I've been back and forth on this. It seems like both of them trying to chase down advertisers and build a platform from scratch is a lot of duplication. Why not combine?

But hearing both companies talk about their plans etc., I sense that both are too proud and too headstrong to do anything of the sort.

Imagine Yahoo, for example, allowing MSFT to buy a stake in them, and in addition, to take over and use adCenter as the platform. As the shoe was on the other foot (Microsoft using Overture as their PPC platform) up until now, I'd think that there is little chance of this happening. It would be too humiliating.

But if Yahoo's financials were to decline, possibly they'd need to consider some kind of bold move to combine with a major global power (media company or whatnot). But would it be with Microsoft? Probably not... mainly due to pride and not wanting to be subsumed by Microsoft, I think.