And Then There Were Two? A Look at The Microyahoosoft
February 4, 2008 – 3:00 am
Posted in strategy, internet
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.
Tags: Business, email, Facebook, IM, Mac, Merger, Microsoft, PC, SEM, Yahoo
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From the daily (often hourly) ritual of checking Facebook for updates on the lives of my friends I began to wonder, could Facebook be the next evolution of personal e-mail? What is E-Mail? Well, Wikipedia defines it as ”a store and forward method of composing, sending, storing, and receiving messages over electronic communication systems.” On the personal side, many people send emails to share news, forward interesting articles, discuss topics, and/or communicate to multiple people at once.
