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Microsoft Circles Back to Yahoo With New Offer
Ian Lamont writes "Microsoft has come back to Yahoo with a new offer that would involve it buying part of Yahoo. No details have been released, but sources told the Wall Street Journal that part of the arrangement would involve Microsoft selling display ads next to Yahoo search results. No word yet on how this will impact Carl Icahn's proxy war with Yahoo's board."
Now, if MSFT, say, goes through and buys just the Yahoo Search division, it sounds like Yahoo is free to go become a content/media/etc. company free of worrying about Google and search.
My question: who gets domain over the homepage, Yahoo.com? If Yahoo retains Yahoo, but MSFT owns the little search box on the page, then who decides how prominently the search is featured on the homepage, how it is integrated into the content, etc.? Yahoo would have incentive to make the content front and center, and who cares about the search box...
It might be hard for MSFT to integrate all of Yahoo, but it's even harder for MSFT to integrate part of Yahoo...
I still expect a full acquisition to occur. Whether its $32, $33, or $34 or something else, we'll see...
As soon as Carl Ichan got involved it was almost a forgone conclusion that Microsoft would be back to deal with Yahoo given Ichan's reputation for bringing together bickering parties in merger deals which deliver value to the shareholders (including Ichan). I had previously predicted that Yahoo would be able to resist a takeover offer from Microsoft (that was before Ichan got involved and started buying millions of shares) but even then I thought that it was a bit strange for Yahoo to turn down a 70%+ premium on their share price (initial offer of Microsoft) to be acquired (a good price by almost any recknoning, irrespective of the long term outcome of the merger). The onus will now be upon the Yahoo board to detail their plan to the shareholders and prove that they can offer a better value with a Google partnership (which seems to be their proposed direction) than Ichan (who will push for resumption of talks with Microsoft in light of a limited alternative pool of qualified bidders) can with a resumption of talks and possibly a sale to Microsoft. Even if Yahoo manages to hold off Ichan, they would really have to outperform in the next 3-5 years to beat the upfront 70%+ premium that they originally turned down to remain independent and the prosepct of a protacted duel with Ichan will make that independent stance even tougher to justify in the months ahead (possibly allowing Ichan to buy up more battered Yahoo shares and strengthen his hand even more).
ISO,OLPC... soon Yahoo? Also, who is paying for all the Novel-Microsoft ads all over the internet?
"Thanks for all the money you paid to us. We've used it to buy off ISO among other things" -Microsoft
I completely agree. I ask my friends "when was the last time you intentionally clicked on a web ad, and then actually bought something as a result?". They can't seem to recall. I'm sure there is something to be said for getting the product name out there -- somehow, subconciously, people will remember their product name, but I doubt it's worth that much.
I keep waiting for companies to figure this out, but online advertising keeps growing. I don't get it.
Because regardless of how many hits you get, if you don't tell people that your product exists then no one will ever buy it, and advertising on TV is too expensive, especially, when you are trying to reach a geographically diverse audience.
That's just your and your friends' nerdiness.
A good consumer will click on anything shiny, just like (s)he will sit through 20 minutes of ads per show, and buy something based on the ads. Marketing folks aren't dumb - they're highly paid and rating systems show what works and what doesn't.
I don't know if comparable rating systems exist for web advertising though.
thegodmovie.com - watch it
Basically you don't understand business. If you love freedom and democracy, then instead of irrationally hating Microsoft you should rationally aknowledge that Yahoo sold out to the public to make money in trade of freedom. They also had the freedom to go to other companies for a better offer, which they tried to do, and failed. Do not confuse their failure to retain private ownership or to find a better bid as a lack of democracy. Rather, what we see unfolding is truly the result of freedom (except mayve anti-trust concerns limiting Google's ability to bid).
you certainly are missing the big picture, but i'm sure you're not the only one. the long and the short of it, is that google adwords *work*. maybe not on you and your friends, but in the big picture, they do. microsoft understands this.
google hit the advertising "holy grail" with adwords -- although no one has said/realized it, adwords are what the marketing industry has been wishing for since freud's nephew invented it -- specific and contextual advertising.
before adwords, advertisers mostly had to throw a bunch of shit at the wall and hope that some stuck. billboards and subway ads are a good example. anybody and everybody sees that ad, so if you have a niche or specific market, you have to advertise to 10k people to get to your 100.
radio and newspapers are a bit better -- if you want to advertise your new cat food, you can call the publishers of "cat fancy", and hit closer to the bulls' eye.
adwords allow advertising to a demographic of one. if you sell gloves that are missing the middle finger on one hand (for people who've lost that finger), you could theoretically dial in your adwords to catch that person.
adwords and gmail make it even more powerful. now, instead of catching people who are actively searching the web, you can just filter their email.
i use gmail, and i have actually clicked on a few adwords because i had sent an email to someone asking if they had xyz for sale, and the adwords threw up a link to an online store that did.
adwords are NOT banner ads. they're specific, they're not obnoxiousm, and they work. this is the piece of the pie microsoft wants to in on, and they're trying to acquire yahoo (at least their traffic) to do it.
i may be going too far here, but if they don't get yahoo, they're going to lose out on the (consumer) desktop in a big way -- is there a part of their business that isn't slipping?
mr c
"Physics is like sex. Sure, it may give some practical results, but that's not why we do it." - R. Feynman
I'm still not convinced that we know why Microsoft wants Yahoo. Is there nothing else that Microsoft can do with $40 billion? Is there no Microsoft service or product that needs more investment?
You're missing the point. These are still people YOU KNOW. There are people who click on ads, people who think the blink tag is useful, people who pay AOL for their dialup, etc..
It's even better than just the targeting. AdWords + Analytics lets you know what you're getting conversions off of and what you aren't. So if you spend $100 on two ads and one is profitable and one isn't, you can dump your budget into the one that's making you money and abandon the other one.
Relevance to users is great, but conversion tracking is the best part of internet advertising.
As long as Yahoo gets to keep its open technologies (the Flickr API, Pipes, &c.), that's fine with me. Let Microsoft spend their cash reserves on a second-tier search engine.
Having said that, it's probably still prudent to back up your Flickr and del.icio.us accounts, especially if you don't use Windows.
I think there is a difference between a sponsored link and your generic web ad that one might get on site frequently visited for information and that gets updated daily like a news site. Most people probably ignore those out of necessity since they visit the site too often to waste time on the ads.
However, there have been times when I've been interested in some item, like a particular kind of pen I'm partial to, and Google will return retailers' links. Granted, these are not your typical web ad but more of a simple (paid for) link. But I have clicked on them simply because I want to buy the product.
Gerry