Microsoft sat back while Google showed everyone how to take a search engine from 2 kinds having fun to a top 20 American company. How did they do it? Well just look at their revenue numbers and you will see a massive percentage comes from the Adwords & Adsense products. Now Microsoft is trying to get into the online advertising game but can they hope to compete without acquiring Yahoo and their volume? I think Microsoft will make a move at Yahoo and its going to happen in 2007.
Here are 10 reasons why:
1. The search algorithm… duh… Microsoft’s horrid search algo is by far the single biggest problem that Microsoft has right now. The problem is that when there are no users using the search engine then there are a ton of ads that never are shown. If Microsoft were to acquire Yahoos search algorithm this would be a GIANT step in getting users back.
2. Overture Yahoo Search Marketing. Microsoft used to broker every thing through the company formally known as Overture for showing ads on msn.com search. They are now trying their own company but its chugging along at a very slow pace. Most advertisers like Microsofts Adcenter but agree there is just not enough volume from its search engine (see #1).
3. Yahoo Publisher Network – YPN IMO is the best contextual advertising network there is. They have a great quality control team and also a REAL PHONE NUMBER THAT REAL PEOPLE ANSWER if you have contextual questions. Nobody provides the level of customer support in regards to contextual advertising that Yahoo Publisher Network does.
4. Flikr – Again Microsoft may have a similar product but the volume is here. Boom another zillion people to market to.
5. del.icio.us – While Google is signing up or buying all the 2.0 advertising space Microsoft can acquire a huge name right here.
6. The People – Microsoft has tons of stale old people who do not understand this new industry. They are starting to just now contribute to rival open source projects like Zend and Mysql. Acquiring Yahoo people like Jeremy Zawodny (who wrote a book on Mysql and also contributed tools to the project). Microsoft realizes that they are not only losing ground in the search industry fast but they also lost market share in server technology to Zend (PHP) and other open source products. If they want to keep their market share with Windows Server I think bringing in a lot of these brilliant Yahoo developers would keep them on the right track in making sure they integrate well with the open source items.
7. Video – Between Yahoo Video and Microsoft’s Soapbox They might be able to combine for a decent share of the video market. Why is the video market important – 2 words – video advertising. I took part in the beta test when Google did a trial run of video ads and then 2 months later they buy out youtube… ya… video advertising. Ad Volume ++
8. Community properties – Yahoo has yahoo groups whose numbers rival Myspace. Never heard of groups.yahoo.com ? Ohh yea you forgot about that huh? Instantly you have millions of people to show more ads to! Ad Volume++
9. Business Directory – Microsoft Just gave up there Business Directory efforts. Yahoo has always rocked it with their paid inclusion directory. Its by far the most respected business directory on the internet. Even at 300$ per year fee webmasters line up all day to submit there websites. Mean while Google’s Business directory is a laughing stock being powered by the corrupt DMOZ.
10. Yahoo Just cleaned house. It seems to me this makes a merger that much easier with less chiefs to merge.
Will it happen? To me it seems like a no brainer… If Microsoft hopes to compete in this new internet economy (contextual ads) they need a bigger chunk of the search market. Yahoo is the only option IMO.
Ricky Peterson (24) 
ZK @ Web Marketing Blog (23) 
Holly Mann (12) 
R Kumar (12) 
gurtey (9) 
Shanker Bakshi (9) 
Jacques Snyman | 3 Quotes (8) 
Yisraeli Foods (8) 
Find Affiliate Offers (5) 
Michael Zhao (77) 
almir (76) 
fas (75) 
R Kumar (74) 
Rick Kats (70) 
Jay @ work from home (62) 
Dino (61) 
Dick (628) 
Goran Website (495) 
Melvin (330) 
Ben Pei (329) 
Taris Janitens (274) 
meethere (269) 
Tushar Dhoot (265) 
Tushar (260) 
Moneybites (259) 
Oh, and neither does Yahoo, heh
Wow, Microsoft never ceases to amaze me…
Prediction confirmed. Next.
Maybe yes-maybe no, maybe sex- I don’t know….My nick is ChicaSensual20…Tell me, how I’m on cam?…chat page!!!
http://talktomehere.tripod.com
Hmm, i would like to see how each of them compete then..
Microsoft building a new search engine. Maybe this search be better than Google and Yahoo?
Doubt this would happen now that Microsoft just spent $6 billion on aQuantive.
Microsoft and Yahoo could do it. But they have to beat google to the next step. You have to be an idiot not to see it. The next major evolution in computing is on the horizon. 100% online operating environment for end users. This is what the world wants and needs. A 100% globally accessible desktop work/play environment (Like a laptop that you don’t have to bring with you everywhere). It needs to be totally customizable like a myspace page but functional so you can work on/with it. The benefits are endless.
1. Less hardware needed for the end user.
2. Your data is safely stored in data centers.
3. It will no longer be your responsibility to keep your software up to date and virus/add free.
4. All you essentially will need to buy is a screen/mouse/keyboard and a networking card.
6. Hardware limitation become the problem of the service provider and not the end user.
7. You can access your work/music/entertainment from any terminal world wide with out compatibility issues.
8. One central point of interface to all of the above for the user.
9. No more re-formating your hard-drive.
10. No more buying a new PC to upgrade to the latest software.
11. Access to your personal desktop from your terminal in your hotel room, the airport, your moms house, your cell phone. The same exact desktop every time.
For those of you who think your smart and are going to reply about how terminal based OS’s already exist, (you are the kind of people who are going to miss the bus).
Think about all the opportunity to capitalized/monetize here. You can offer a basic service for free with ads, essentially the bait. Then charge for extended software application packages, and extended hardware capacity.
The point of my rant is that if M$ teamed up with Yahoo and they were able to beat google to the “Revolution of the OS” then maybe they would both stand a chance at surviving.
Nice inforamtion, Thanks for posting.
Interesting, very interesting.
I agree on Yahoo’s support. I had an issue with them, and not only did I have the ability to call them, but they actually called me first and took care of everything for me. It makes you feel a lot more comfortable if and when problems arise.
Proofreading is one word. Thanks for playing.
Lot of digs there! Great list here too… I’m sure we’ll see a few “acquisitions” in 2007 as the big names fight for more of the internet audience.
Just wanted to say congrats on gathering over 800 Diggs!
Actually, if I’m not mistaken, MSN Adcenter was originally “released” in beta well over a year and a half ago. They even had the opportunity to use MSN AdCenter but chose to sign another deal with Yahoo! (or Overture) so they could continue to test their product.
This is nothing new with big Corporations as Dillsmack even mentioned above — Google has done this MANY times. Grab what’s hot if you can afford it…why try to reinvent the wheel when you can buy a set for cheaper?
It’s not that they couldn’t, it’s that they “didn’t”. We all know Microsoft has left plenty of opportunities to others when they could have made a major impact in a new area. Oh well, they’re still making money.
Not to mention the use of commas where they didn’t belong. Anyone can be critical of grammatical errors when they’re trying to hate on “something”.
These are great reasons why that might happen. If they do buy Yahoo! I hope they dump their MSN search. I hate that thing although it has its purposes for us black hat’s.
Are you even serious? Didn’t crush Apple? What’s their OS marketshare again?
I want to see this happen.
I’m down with anything that Microsoft and Yahoo do together. Unfortunately I’m not a stockholder in either so, I guess their main target will be “G”’s audience and product services.
Why would Google build their own Google video when they are going to buy Youtube.
Its never “too early” to make predictions, unless you fear being wrong and want to wait until it already happened.
And what do you think about Yahoo messanger in this case? ) Would M$ kill this project?
Come to think of it, the new IE7 reads “Windows Internet Explorer provided by Yahoo”. For MS to give Yahoo that level of control of IE, then I am inclined to agree to a degree with Shoe Money. Something is coming up in 2007 with these 2, but not fully sure what.
Shoe,
Good post, but I doubt that Yahoo will be bought by M$ even if I think your arguments make sense. I think more of an extensive cooperation between the two companies is realistic for 2007. It’s still to early to make predictions like yours.
My main reason why it won’t happen:
Why would MSN develop and run their own Adcenter (incl. syndication) with an immense staff if they are planning to take over the entire YSM division? It does not make sense for an “old school” company like M$
hello linkbait, nice job! To all the folks bitching about grammar, you missed the point of the article entirely.
I agree with others who have said ppl from yahoo will go to greener grass if MS buys them.
I find it amusing that neither flashape nor tim otoole used a capital letter between them. And using words like “gonna” doesn’t exactly make you sound credible, Tim.
Credibility! Go away you stupid nose digger.
Wow, you really need to proofread your work before you post it on the internet. How can anyone take you seriously when your writing has the most basic of grammatical errors?
Yeah, they really crushed Apple and IBM.
Or not.
eventually almost all applications will become web based.
remember the days when updates were done via floppy or CD.
what will form the basis for the new digital divide is not just whether someone has computers, but whether it’s linked to the internet.
the fact that you’re reading this blog, which is a hosted application shows that connectivity will increasingly be important as everything shift to the internet. maybe not today, but if you don’t see the trend coming, you’re in for a surprised.
ps: go audit your own PC. if you’re surfing, blogging, instant messaging, online gaming and emailing, you sure as hell are using online-enabled apps more than 1% of the time.
eventually almost all applications will become web based.
remember the days when updates were done via floppy or CD.
what will form the basis for the new digital divide is not just whether someone has computers, but whether it’s linked to the internet.
the fact that you’re reading this blog, which is a hosted application shows that connectivity will increasingly be important as everything shift to the internet. maybe not today, but if you don’t see the trend coming, you’re in for a surprised.
ps: go audit your own PC. if you’re surfing, blogging, instant messaging, online gaming and emailing, you sure as hell as using online-enabled apps more than 1% of the time.
Hmm, I imagine Yahoo is too pricey for Microsoft. Yahoo is not doing that badly right now….
You forgot No # 11
Yahoo! Mesenger merge with f…n Micro$oft MESS enger.
Microsuck err micro$oft sucks, they cant even make their
job (winOS) they so suck at the internet also but they got money like hell so if Yahoo sells their company for money new name will be Yahell and another big internet brand will be die so what ? Mr G will rule the internet.
a Yahoo Fan
that’s just stupid, they could not pay 1.64 bil for youtube where they will get money for Yahoo.
You got the point
I always have to think of the time when MS bought “dos” for $50000 (thats nothing!) to have an OS for IBM…
I doubt Microsoft will purchase Yahoo at their current price. Maybe in a few years when they’re in serious financial trouble.
I’m not a “fanboy” of Microsoft but I do respect them more than any other company in America. Each year the Gates Foundation donates more money to public projects than Google, Apple, Oracle, IBM, etc. combined. That really says something about them. I hope you take that into consideration when you choose to bash them because they aren’t the best at everything.
Ever hear of proof reading?
I like Mike Peters’ play. MS should start a recruiting drive for key Yahoo people.
But I think they should be prepared to buy it on the spot, because letting a devalued Yahoo fall into Google’s hands would be bad news for MS
This is interesting, but this guy would have a lot more credibility if he learned the difference between “their” and “there”.
incase you don’t know jeremy (shoemoney) he’s one of the bigger search engine marketers. i think if anyone would be credible to write a blurb about this topic it would be him.
also.. i know several executives that run huge corporations and they are some of the shittiest typers/spellers/grammarists in the world.
great visionaries != great writers.
and with that being said good one jeremy
//g
I think if Microsoft was bought by Yahoo a lot of people in Yahoo would leave and go to Google.
Live totally sucks. Its even worse than their old search engine. It just goes to show that money can’t always by talent.
Microsoft has plateaued and from now on will be like IBM having its ups and downs and trying to keep up with whoever is the new kid on the block.
As for you j@rkoffs moaning about grammar and spelling get a life.
Put your money where mouth is and not where you shoe is.
If you are wrong, you jump in the hudson river fully clothed, but if you are right, we will worship the money your shoes walk on.
BTW, my opinion, they better off staying software, because alot of internet media companies are switching to MACs as part of the corporate strategy agasint M$. Pretty interesting, and I am putting my money on APPLE.
This will be really interesting. If Microsoft does acquire Yahoo!, I think they can really get closer to dominating the internet. I even think Yahoo! could replace Windows Live and & MSN.
This will all end with crying.
i agree. i came here through digg expecting a serious article. if you are going to attempt to write a blog like this in english then:
1) learn the language, spelling and grammar included
2) have your buddies check over what your gonna post
3) set up a blog
4) post away
5) get dugg
end result, you sound credible and have a readable blog.
Thank God Yahoo is being coaxed to merge by a borderline illiterate person who cannot be bothered to get his copy cleaned up before pushing it on all of us.
heh, thank you, I was just about to write the same thing myself.
Microsoft will never buy Yahoo. I’ll personally sit down and eat my hat if they do.
Why? In a nutshell, Microsoft doesn’t like to pay high. Too smart for that. Microsoft doesn’t buy giants. Microsoft destroy them from the inside.
Gates is a gifted poker player and Microsoft’s history reveals their ingenius tactics when it comes to crushing one giant competitor after another without shelling a dime (Xerox-IBM, Apple, Netscape, Borland etc.)
In an attempt to keep this comment short, I’ll stick to a single story -
It was the early 90’s. Every single software developer was using Borland to develop computer programs. I had Borland posters on my wall. We loved them! Borland had the best IDE (Integrated Development Environment), best tools, best support. Microsoft had a sluggish development environment that was slow, buggy and worthless.
Borland controlled 92% of the market. It was obvious that Microsoft had to do something to gain market share.
Everyone were certain Borland (then a $400M company) is going to be acquired by Microsoft. There was simply no way Microsoft could catch-up, with the Microsoft product lagging 3 years behind Borland’s in features and functionality.
What did Microsoft do? Did Microsoft acquire Borland? No.
Did Microsoft approach Borland for M&A talks? No.
Did Microsoft try to further develop their IDE/algorithms until it was better than Borland? No.
Microsoft hired a head-hunting team who approached the top 6 software developers in Borland at the time and offered all 6 an offer they simply can’t refuse.
5 of the 6 left Borland and joined the ranks of Microsoft.
Within exactly 10 months, Microsoft came out with the new MSDEV studio, incorporating all the features Borland had (autocomplete, built-in debugger). 2 years later, Borland’s market share fell to 9% with Microsoft clearly dominating the market.
This is a single story however the patterns, tactics and technique have been followed by Microsoft throughout the years.
Microsoft is not a software development company. Microsoft is a well oiled technology capitalization machine. To this date, no other company has come close to Microsoft’s capability of converting sourcecode to cash.
Holy Crap you write horribly. Their for people. There for place.
No it wont happen, Yahoo will not let Microsoft take over them, because they know Microsoft don’t do anything good in the Internet right now. Microsoft its already a too big company to move fast like Google do right now.
Sorry for my English, its not my first language
Re: #1 problem, you should try Live search these days. I am NOT saying it is as good as Google, but it is FAR better than it used to be (the change seems to have been made ~6 weeks ago).
That being said, I don’t disagree with the theory here. I think Ask.com might also be in the running for an MSN-only aquisition.
No MS doesnt need to make purely web based apps because not everyone wants everything on the web. Some things are great for web only but honestly id rather have 99% of my apps on my home pc where i know they are safe and secure.
Whats your PS3 comment about, that right there shows you have no clue what your talking about..
Ya good question.
Whoever wrote this tripe needs to learn how to spell and construct sentences. It’s hard to take someone seriously when he writes worse than a typical 9-year-old.
and what prise do you think can be proposed?
Hey Dru and Steven, you’re the “Avg. Joe” I was referring to in my post. Go MS fanboys.
Ok, lets all jump on the “hate Microsoft” bandwagon, give it a rest people, just because they are #1 means they have to be perfect, despite popular opinion, they are human too! Oh and Yahoo being a company to “screw up”? Buddy, get your facts straight, Yahoo has been going down hill for more than a year now and is at its lowest its ever been, it really cant be screwed up anymore.
Catching up to the PS3? Microsoft is already destroying Sony. Microsoft is a SOFTWARE company not a “the desktop is the computer type of company” (lol), Microsoft can and probably will do well ANYWHERE where the is/can be software, because the have the bucks and the talent.
Yahoo: Market Cap 36.65B
Microsoft Market Cap 296.47B
$500 billion might be a bit on the high side.
umm you dont need 100% of someones market cap to take them over….
they would need over 50Billion to pull this off. Yahoo’s market cap lest we forget was close to 35bill recently.
Do they have $500 billion?
Microsoft is the evil empire? Oh buddy you just wait, if Google ends up having no real competition in the search engine market. You will know what evil looks like. Google is already getting cocky (QS relevancy anyone?). Trust me, some good competition from the Redmond Giant is exactly what Google needs.
Microsoft ~had~ plans of ruling the world way beyond the PC until Google came along and messed everything up.
- They bought cable companies to own the pipes going into your home.
- They created the Xbox to gain another foothold in your home. Notice how the Xbox is becoming more PC like? Avg. Joe guy will be using their software ~and~ their hardware for his computing/gaming needs. Goodbye Dell. You’re getting shafted by your partner. I’m sure this device will also become your DVR, Home Theater, everything. 1 device does it all, brought to you by Microsoft.
- They create the Zune, to gain another step your home.
- They haven’t quite figured this internet thing out, so I agree with Shoemoney, they will go after Yahoo and screw a good company up.
See them converging from all areas into one place, our home? If it weren’t for Google, this probably would’ve happened already. Thanks Google for saving us against the evil empire.
despite everything that’s said, i feel microsoft is still very much a ‘the desktop is the computer’ type of company.
witness how vista and iterations of office are still box/pc-based.
even bill gate’s book had to be ‘revised’ to incorporate the internet in it’s second edition (i think it famously had only a couple of pages mentioned in the road less travelled).
until microsoft gets it’s game up and shifts it’s focus from the box to the intangible internet, whatever type of web2.0 is going to be a long time in coming.
it’s like expecting an old line telco with tons of dedicated copper wiring to throw it all away and embrace VoIP.
it’s necessary, but not likely until it has to be dragged kicking and screaming to migrate.
in 2007 i think microsoft’s resources will be spent fixing vista and catching up with the PS3 to focus on any other major acquisitions.
still we can all dream.