Yahoo's Joyful, Difficult Journey
This is a very good summary of Yahoo!'s recent past and how it comes to be where it is today. The Microsoft rumors have been circulating for some time, and for good reason. The headlines are mostly about Search, but the real story is in Display.
On the Search front, I think the consequences are relatively straightforward, and, to be honest, this does not do much in the short term for either company. Google is far too dominant, and will continue to be until a competitor can google Google. I do not think a Microsoft/Yahoo! merger will increase the chances of that happening from these guys. However, they should well be able to save some money keeping up by not competing separately. This will save R&D resource, and also, by combining, increase their own advertising network which will have a positive impact on the coverage offered and therefore revenues.
The really interesting future is around display advertising, as Google, Microsoft and Yahoo! have been building alternative views of the future. Microsoft has already plowed $6bn into Aquantive, while Yahoo! has purchased Right Media and BlueLithium. Meanwhile Google is still digesting Doubleclick. Unlike Search, there is no model for success here. A merger would present Google-click with a threat, but also a great opportunity to push ahead during the transition. Advertisers too might no longer be so worried about piling their display dollars into Google, if the evil Microsoft is also on the scene.
Yahoo! actually seem to be getting their act together on the advertising strategy, and I think they could be a very credible independent player. Unfortunately, they have disappointed too many times, and for those who still have the faith, the fruits are unlikely to be tasted until 2009. Microsoft's offer is tempting to battered stockholders, to cash in now rather than hang on to the hope of Yahoo!
This is a very good summary of Yahoo!'s recent past and how it comes to be where it is today. The Microsoft rumors have been circulating for some time, and for good reason. The headlines are mostly about Search, but the real story is in Display.
On the Search front, I think the consequences are relatively straightforward, and, to be honest, this does not do much in the short term for either company. Google is far too dominant, and will continue to be until a competitor can google Google. I do not think a Microsoft/Yahoo! merger will increase the chances of that happening from these guys. However, they should well be able to save some money keeping up by not competing separately. This will save R&D resource, and also, by combining, increase their own advertising network which will have a positive impact on the coverage offered and therefore revenues.
The really interesting future is around display advertising, as Google, Microsoft and Yahoo! have been building alternative views of the future. Microsoft has already plowed $6bn into Aquantive, while Yahoo! has purchased Right Media and BlueLithium. Meanwhile Google is still digesting Doubleclick. Unlike Search, there is no model for success here. A merger would present Google-click with a threat, but also a great opportunity to push ahead during the transition. Advertisers too might no longer be so worried about piling their display dollars into Google, if the evil Microsoft is also on the scene.
Yahoo! actually seem to be getting their act together on the advertising strategy, and I think they could be a very credible independent player. Unfortunately, they have disappointed too many times, and for those who still have the faith, the fruits are unlikely to be tasted until 2009. Microsoft's offer is tempting to battered stockholders, to cash in now rather than hang on to the hope of Yahoo!
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