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Microsoft offers $44.6B for Yahoo

steve ballmer

If this deal occurs, I wish Yahoo and Microsoft all the best.

However, combining two organizations with serious problems in search wouldn’t yield one strong organization.

It could even make things worse.

As I see it, the only three real threats facing Google are

  1. Google itself, external: Growing concerns over privacy and transparency
  2. Google itself, internal: Maintaining culture, quality, and nimbleness given their explosive hiring rate
  3. The “X” factor: Some garage startup nobody’s heard of yet

Link: Microsoft offers $44.6B for Yahoo

SEL interview: Q&A With Microsoft On Proposed Yahoo Purchase: 2+2 = 1

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  • Alan Rimm-Kaufman
    Alan Rimm-Kaufman founded the Rimm-Kaufman Group...
  • Comments
    6 Responses to “Microsoft offers $44.6B for Yahoo”
    1. Stephen says:

      Alan,

      Your blog was my first stop after reading several articles on Microsoft’s announcement this morning. Your comment “combining two organizations with serious problems in search wouldn’t yield one strong organization” is the best comment I have read so far today.

      My biggest fear is that they will try to combine Microsoft’s adcenter platform with Yahoo search and create a completely and totally half-baked platform. I keep thinking that someone at MSN would have to be saying “hey, let’s just copy what Adwords is doing and then try to do a couple of things better.”

      My comments are not meant to “pile on.” It’s just that our current experience with trying to get into MSN’s closed API program beta is turning out to be a phenomenally painstaking process. It is beyond comprehension why if your company is in 3rd place you would make it so ridiculously hard for new partners to leverage your platform.

    2. Jeremy says:

      I disagree on it making things worse. Right now, many Google advertisers will not advertise on Yahoo and MSN because the volume is too small to justify the extra effort. Their combined volume makes it an entity that is much harder to ignore. For that reason alone, this is a good idea.

      Yahoo+MSN does not need to beat Google. Pepsi has done very well being a strong second behind Coke. That is what Yahoo+MSN should aim for at this point.

      As a search marketer using Google and Yahoo, I think this is great news.

    3. Thanks, Stephan. If I had to bet, if the deal goes through, they scrap the MSN code and move the whole kaboodle onto Panama. In short, MS becomes a big advertising conduit for the current Y! platform. I am sure they also have big “synergy” plans to integrate MAHOO paid search into MSFT’s small biz desktop software, similar to Inuit–Google partnership in the QuickBooks ecosystem.

      Jeremy, I think YHOO and MSFT search both face secondary problems, beyond their respective inventory levels.

      I’d point to (in no particular order) hiccupy APIs, lower-converting traffic, and sales organizations who, at times, place the needs of the engine above the needs of the advertisers.

      While Google isn’t perfect, and while Google also has made moves which help Google at the expense of their advertisers (broad match, domaining, frustrating opaqueness in their bidding model, etc), I think advertisers and agencies often get a better (better, still far from perfect) deal from Google: more targeted higher converting traffic (better algos), better tools (Adwords Editor) and stronger APIs, better site targeting, etc.

      It isn’t just the volume.

      What are odds the bookmakers are giving that this deal goes through? Certainly anti-trust issues couldn’t cause any kind of hold-up!

      Alan

    4. Followup: SEL has an interesting interview with Microsoft on the acquisition with the phrase “2+2=1″. I understand the 2+2=1 equation is a metaphor for “two seconds coming together to become first”, but the cynic could interpret the metaphor as “the combination is far less than the sum of the its parts”.

      SEL interview: Q&A With Microsoft On Proposed Yahoo Purchase: 2+2 = 1

    5. Eamon says:

      I would have thought spending vasts amount of money on visual media would have been a lot more useful.

    6. Eamon says:

      Sorry, my point being that ‘search’ is important but as TV and other traditional media go digital and their audiences continue to go online for visual media (entertainment / information) so spending money here might have been a lot more useful.