Microsoft offers to buy Yahoo for $44.6 Billion
February 1st, 2008 Posted in Economics, Microsoft adCenter, Yahoo Search MarketingNormally big news such as a Microsoft purchase of Yahoo would be left to normal news sites, but since the acquisition would have profound effects on the pay-per-click advertising market, I can’t pass up the chance to comment on it. From a holistic perspective, Microsoft’s acquisition of Yahoo comes as no surprise, as Yahoo has been floundering financially in recent months. From an online advertising perspective, Microsoft will try to position themselves as the only viable alternative to Google Adwords. Or so they think!
Considering Google currently has the paid search market cornered with anywhere between 60-90% of search traffic, Microsoft’s acquisition is somewhat insignificant. However, if they were to merge their respective sponsored search programs, they may certainly whet advertiser appetite with:
- Significant content network coverage, with both Yahoo and Microsoft properties
- A monopoly on partner ISP start pages across North America
- Mature e-commerce solutions, well ahead of Google’s ‘Froogle’ and ‘Product Search’ engines
- Enormous user base in Yahoo Mail and Hotmail/Live Mail applications
Integrating both Microsoft Adcenter and Yahoo Search Marketing won’t be easy, as both systems are considerably unique. Should Microsoft opt to merge the programs, it may certainly lower the effort required to learn and manage two separate programs. One major pain point in the past was that advertisers had to put a lot of time into managing separate programs with little return on investment.
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