Internet Marketing Blog

Yahoo Microsoft! Yahoo Google!

February 5, 2008 – 5:21 pm

What does it Take to Topple a Search King?

It was last week that I was talking a group on my friends about the state of Yahoo!, and what to expect from the company at a users perspective. It didn’t look good. With shares falling, job cuts looming and an increasing sense of user disapproval, Yahoo was then and is now mired in a fiscal crisis.

Now their name has become a beacon of press, swirling around the likes of Microsoft and Google. In what is shaping up to be one of the biggest and complicated mergers in Internet history. The Google of the late 90’s, Yahoo is being offered a shoulder to live on.

They however didn’t invite it and it is being backed into a corner, a place Yahoo is not used to, nor taking lightly. Last week Microsoft put in a hostile offer of $44.6 billion dollars for Yahoo and when Yahoo chief Jerry Yang, got the phone call he was in a meeting with other operating officers and ready to call it a night. When Mr. Yang hung up the phone that meeting spread into the night, discussing what this meant for their corporate brand.

Yahoo feels that Microsoft’s offer is undervaluing the company at $31 a share, and have tried to reinstated its talks with Google, Fox, AT&T and AOL hoping to increase the buyout. But with the US facing another Recession, beating the $44 billion offer is looking slim and news is that complicated assistance funding would be the terms of offers from Google. Microsoft is urging Yahoo to accept its bid and staying private is a grim alternative.

Google, already with 62% of the worldwide Internet search market (Yahoo 6%, Microsoft 2%), will bring strong attention from corporate regulators and will drift ever so heavily on the antitrust line, if it seeks to buy Yahoo. Google says that the merger with Microsoft “will stifle innovation and leverage its dominating Windows operating system to set up personal computers so consumers are automatically steered to online services, such as e-mail and instant messaging, controlled by the world’s largest software maker.” Another argument for antitrust regulators.

Realizing that whatever happens with Yahoo and its new parent company, it will take time to regulate the merger. Once that transition happens advertisers will be looking at a huge place to put their messages. Like the creation of RCA, Timer-Warner, CBS, and NBC in the last century. The Yahoo merger is a signal of media resources combining to equal the cultures trend in a time of great information expansion.

This merger will bring the final bell for traditional markets to the new ones of the Web 2.0 world and bring us further to Web 3. Together Yahoo and Microsoft are far ahead of Google in email and instant messaging and would dominate in that vast direct market. Not to mention that other huge new market, Microsoft’s Xbox 360 video game system, which has its own live internet service for players and considered the leader in that multi-billion dollar next generation Video Game industry . Microsoft having Yahoo’s visitor and user bases would propel the software powerhouse into the Internet search and advertising market race in a strong way.

Its an all out search engine ad revenue war, with Microsoft looking to delve further into the online experience by making a strong #2 to Google, who is looking to stay king of the hill. The battle for search dollars is on and advertisers should be thrilled at that fact. The ability to get into the markets of two advertising heavy weights for the cost of one is a data diamond mine. Which in contrast is good for smaller start-ups looking to spread their brand quickly and effectively. So start making your plans for a powerful shift in where you can focus your marketing strategies.