Lawrence Gee | Marketing, Internet, Creativity, Strategy

And Then There Were Two? A Look at The Microyahoosoft

No, it will never really be called Microyahoosoft or Microsofthoo or even Yahoosoft but the proposed $44.6 billion bid by Microsoft for Yahoo! was definitely really big news last Friday.  It takes two huge Internet players and creates a beast of a company that just might have a chance at slowing down the Google machine.  So what’s the potential impact of such a merger?  Let’s take a look at some of the obvious and not so obvious synergies:

Search and Advertising Platforms

The most obvious outcome of the proposed merger would be to combine the #2 and #3 players in the U.S. Search Market.  According to a CNN article, Google holds approximately 58.4% of the U.S. search market, while Yahoo has 22.9% and Microsoft’s share is just 9.8%.  In terms of online display ads, combined Microsoft and Yahoo! would control around a 25% share.  This is big business especially since it’s projected that online advertising could reach $60 billion by 2010.  Both Microsoft and Yahoo! have been struggling to keep up with Google.  Both companies search marketing tools are inferior to Google’s on a variety of dimensions.  Combining forces could help both companies share existing research, development, and other resources. 

E-Mail and IM 

A Microsoft-Yahoo! marriage would combine to create a force in E-Mail and Instant Messaging.  Adding a strong Microsoft Hotmail to #1 Yahoo! Mail only creates an even more dominant player.  Combing both MSN Messenger and Yahoo! Messenger would allow more users to connect to one another.

Social Media

E-Mail and Instant Messaging creates instant networks that Microsoft-Yahoo! could tap into to use use to their advantage in the larger social network context. Also, a Microsoft-Yahoo! would have a much richer portfolio of web properties.  Combined you would have an interest in Facebook (which Microsoft has invested heavily in) and Yahoo! owned del.icio.us and Flickr.  Couldn’t you imagine a larger social network being developed that gets integrated with these web properties and overlayed by these e-mail and instant messaging networks? 

Mac vs. PC ads 

Yes,PC isn’t as cool as Mac.  But perhaps the proposed merger could give PC a flashy purple suit just as a shot of Yahoo! culture might be beneficial to Microsoft. 

All in all, just some food for thought.  We still have a bit of time to consider more effects of the proposed merger — if it does move forward, it probably won’t be finalized until the end of 2008.

No Comments » | Bookmark Me:

Social Search Results

I came across this post in Danny Sullivan post in Search Engine Land today.  It points out that Yahoo! is testing out Del.icio.us (Social bookmarking site) data being integrated into search engine results.  Basically for search results it will list how many people have bookmarked the site and the tags associated with it. 

The posting points out that Yahoo! will not factor in Del.icio.us data into it’s page rank calculations (as of now).  You have to imagine that if people believe that pages are more valuable a la bookmarking then one could argue that it should be factored in to page rank.  It’ll be interesting to see how much more integration there might be with Del.icio.us or other bookmarking sites in the future.  Google already has a “note this” link which can bookmark specific results into your own notebook.  I can imagine Yahoo! allowing the ability to bookmark directly to Del.icio.us, the ability add tags to page results, or the ability to select specific results to share with other people. 

No Comments » | Bookmark Me:

Is Social Network Advertising Special?

Lagging a bit behind rivals Google and Microsoft who already have advertising deals with Facebook and MySpace, Yahoo! just announced plans to sell ads on popular UK social networking site Bebo.  This marks the first time that Yahoo! has agreed to supply advertising for a social network. 

While these social networking sites offer tons of traffic (especially teenagers, college students, and young professionals), the bigger question remains if this type of traffic can translate into sales.  Typically these sites offer a location to keep up to date with friends, send short messages, and give the ability to share personal content such as photos and videos.  Are they there to purchase products or even learn more about them? Probably not.

Looking in the future for marketing on the web, I foresee today’s generation becoming increasingly numb to online advertising (especially banner and text ads).  But is this really any different from ”traditional” media like TV, radio, and print?  I feel that the same issue of consumer apathy applies to all.  In regards to social networking sites, marketers are trying many ideas from traditional display advertising to widgets to dedicated pages to elicit some form of response.  While the tools to reach our target market might be a little bit different, the challenge for us as marketers remains the same – how do we cut through the noise, engage customers, and make them care.

No Comments » | Bookmark Me:

Yahoo! Search Marketing Has No Business Sense

For paid search campaigns (those ads on the top of your search engine results), a company would bid on keywords so that their ad would appear for those search results.  Active companies bid on multiple keywords and various concatenations of keywords.  Usually their portfolio of keywords they are bidding on are in the tens of thousands. 

Keyword portfolios are managed through paid search advertising arms of the various search engines, with the big 3 as Google, Yahoo!, and MSN.  In order to bid on keywords, one can either manually enter in each word and group them by campaigns or ad groups.  If you had a small search campaign with few words, it would be easy to do this online.  But, what if you had to create a campaign of 10,000 words?  Would this be feasible doing it one by one?  Of course not.  Google has an easy to use downloaded application where you can cut and paste keywords in bulk.  MSN is more personalized where you can email a spreadsheet to your account rep to upload.  Yahoo!, on the other hand, has a bulk import feature but it is not active for all customers.

Pause for a second and consider this.  Why in the world would Yahoo! disable this functionality for some customers?  They have a minimum monthly spend requirement before turning this feature on.  This to me makes absolutely no business sense whatsoever.  Yahoo! wants its advertisers to bid on as many keywords as possible.  The reason?  If you click on an ad, then the advertiser must pay Yahoo! for that click.  You would assume that Yahoo! would want its customers to be able to bid on as many keywords as possible and have as many ads out there as possible to get clicked on.

However if you are starting a new campaign from stratch, there is no way to meet the minimum monthly spend requirement to enable the bulk import feature.  So instead of having the ability to try and spend more on advertising, you are limited from the beginning.  I even called customer service to ask about the policy and was told there was nothing they could do about it.  I asked if I could pay a fee to have it activated.  Again, the answer was no.  The customer service rep admitted that she’s heard this time and time again from people calling in on the absurdity of it all. 

Yahoo! needs to stand back and examine its business practices.  While Yahoo! is a technology and content provider, they need to step into its advertisers shoes and realize who is paying the bills.  Google understands this and makes it extremely easy.  Any guesses to who has the majority of online ad revenue?

No Comments » | Bookmark Me: