Where’s the Math- Microsoft + Yahoo = ??
I’m curious to hear what readers have to think about Microsoft’s $44.6 billion dollar bid for Yahoo. With all that has been written of this move, I’ve seen almost nothing on what the actual “synergy” is supposed to be.
Microsoft and Yahoo’s combined WW market share for search is still less than Google’s. Correlated to search market share is online advertising revenue, where again Google trumps Microhoo. So if the individual parts cannot stand up to the giant, how can the sum? Does Microsoft think that their acquisition team can make 2+2 equal more than 4?
Certainly there are cost advantages, and the acquisition will allow Microsoft to reap significant scale advantages. But success in the World of online advertising comes from users and relevancy- which are reliant on technology, not scale of operations. You don’t get better products just by doubling the size of your engineering team.
Obviously, Microsoft is no dumb animal- one has to assume they have a well thought-out and forward-looking strategy for all of this.
The question is- what is it?
February 15th, 2008 at 2:32 pm
Interesting question! Apparently, it’s not necessarily Yahoo’s search capability that Microsoft is after. I read in the Wall Street Journal that Microsoft really wants to acquire all those bazillions of Yahoo groups and their aggregated data. Then, presto, they own the data of millions of people that advertisers want to reach.
Of course, this is an oversimplification, but I think it’s the bottomline of why they’re interested.
February 19th, 2008 at 11:14 am
It’s interesting that Microsoft is looking to acquire Yahoo users, thinking that they can leverage them for the benefit of advertisers. I say “interesting” because shouldn’t Yahoo be doing this already??
Again, my question remains- what does Microsoft think it can do with Yahoo that Yahoo can’t do itself?
February 22nd, 2008 at 9:21 am
Good point. I think Jerry Yang is losing credibility as people look deeply at Yahoo’s flawed strategies.