There has been a lot of buzz online about Yahoo and Microsoft developing an advertising partnership.In early discussions that began in the last several weeks that apparently included a face-to-face meeting,Yahoo CEO Carol Bartz and Microsoft CEO Steve Ballmer are finally talking about partnerships the companies could possibly strike, said several sources with knowledge of the situation.The talks appear discussions for a takeover and both companies donot appear to support any rumours of takeover bid.
In any case, investors will likely cheer any kind of productive re-engagement between Yahoo (YHOO) and Microsoft (MSFT), which has been lacking since a tense takeover effort by the software giant last year after an ugly battle that soured relations between the two companies.The change in leadership at Yahoo has helped, especially since Carol Bartz,a Silicon Valley veteran with much deal experience has none of the baggage from the takeover battle that previous management was carrying. Microsoft still appears to be moving on with their new search engine development under the internal name kumo an effort that has included the hiring a whole lot of talent in the arena, mainly from Yahoo which hopefully will give them the competitive edge.
And while Ballmer has publicly said repeatedly that Microsoft is interested in buying either Yahoo’s search advertising business or search outright, sources close to Yahoo said the company is still determined to maintain control of the important search business and the massive traffic and critical data it provides.
In that interesting plan, Yahoo might take over all of Microsoft’s display and premium advertising business to sell along with its own, while Microsoft would run the search advertising business for the pair.
Such a deal, which plays to each company’s strengths, would bind the two closely together, even though they still compete on many other fronts in the Internet space.
It also joins their forces, creating a sale that is much more attractive to advertisers and allows for better competition against search powerhouse Google (GOOG).
That is especially true, given that Yahoo is the No. 2 player, with a much larger share than third-place Microsoft. According to recent surveys, for example, Google has a 63 percent share, while Yahoo has 20.6 percent and Microsoft eight percent.But it is also in Yahoo’s interest to move fast, since its search traffic could be declining soon.
According to a story published by Dow and Jones,Yahoo could lose up to 15% of its search traffic over the next 12-to-18 months after failing to renew deals with two computer makers, blows likely to hamper the Internet giant’s efforts to remain a viable competitor in search advertising.
The impact on search world.
It seems that most analysts out there believe that Yahoo and Microsoft working together is great for both companies, and needed to ultimately compete on the open market with Google. It would also be good for America, as competition is the core of successful capitalism, and an enhanced competitive market would surely help the economy.
From our Search Engine Marketing perspective, we are happy to see Microsoft and Yahoo speaking in terms of combating Google’s huge market share (multiple sources put them around 63%). Whether or not they can actually perform is questionable but we still prefer they state that they will make an attempt to do so…
Until then, track your PPC numbers closely and diversify where you are able.In early discussions that began in the last several weeks that apparently included a face-to-face meeting last week, Yahoo CEO Carol Bartz and Microsoft CEO Steve Ballmer are finally talking about search and also advertising partnerships the companies could possibly strike, said several sources with knowledge of the situation.
A tie-up between the two would make sense, given Google’s continued dominance in the search and online advertising markets..
This agreement between Yahoo and Microsoft could prove mutually beneficial for both companies by providing Yahoo with necessary technology while Microsoft gains a stronger revenue model and a search inventory. They would also be able to share technology in terms of email, search and display ads.
In a research note,Collins Stewart’s Internet analyst Sandeep Aggarwal writes the “posturing” from both sides suggests that a search deal is in the offing. Aggarwal even goes so far as to suggest that the next step for a possible search deal between Microsoft and Yahoo is the deal announcement itself.