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May 15, 2008
Yahoo Confirms Icahn Proxy FightYahoo has confirmed that billionaire investor Carl Icahn has initiated a proxy fight via an open letter to Yahoo's board of directors notifying them of his intention to replace the existing board with his own slate of directors.
The proposed board includes: Harvard Law Professor Lucian Bebchuk; Frank J. Biondi, Jr., senior managing director of WaterView Advisors; John Chapple, president of Hawkeye Investments; investor and NBA team owner Mark Cuban; Adam Dell, managing general partner of Impact Venture Partners; Carl Icahn; Keith Meister, principal executive officer and vice chairman of the board of Icahn Enterprises G.P.; Edward H. Meyer, chairman, CEO and chief investment officer of Ocean Road Advisors; private investor Brian S. Posner; and Robert Shaye, co-chairman and co-CEO of New Line Cinema.
The full text of Icahn's letter is after the jump.
Carl C. Icahn ICAHN CAPITAL LP 767 Fifth Avenue, 47th Floor New York, NY 10153
May 15, 2008
Roy Bostock Chairman Yahoo! Inc. 701 First Avenue Sunnyvale, CA 94089
Dear Mr. Bostock: It is clear to me that the board of directors of Yahoo has acted irrationally and lost the faith of shareholders and Microsoft. It is quite obvious that Microsoft's bid of $33 per share is a superior alternative to Yahoo's prospects on a standalone basis. I am perplexed by the board's actions. It is irresponsible to hide behind management's more than overly optimistic financial forecasts. It is unconscionable that you have not allowed your shareholders to choose to accept an offer that represented a 72% premium over Yahoo's closing price of $19.18 on the day before the initial Microsoft offer. I and many of your shareholders strongly believe that a combination between Yahoo and Microsoft would form a dynamic company and more importantly would be a force strong enough to compete with Google on the Internet. During the past week, a number of shareholders have asked me to lead a proxy fight to attempt to remove the current board and to establish a new board which would attempt to negotiate a successful merger with Microsoft, something that in my opinion the current board has completely botched. I believe that a combination between Microsoft and Yahoo is by far the most sensible path for both companies. I have therefore taken the following actions: (1) during the last 10 days, I have purchased approximately 59 million shares and share-equivalents of Yahoo; (2) I have formed a 10-person slate which will stand for election against the current board; and (3) I have sought antitrust clearance from the Federal Trade Commission to acquire up to approximately $2.5 billion worth of Yahoo stock. The biographies of the members of our slate are attached to this letter. A more formal notification is being delivered today to Yahoo under separate cover. While it is my understanding that you do not intend to enter into any transaction that would impede a Microsoft-Yahoo merger, I am concerned that in several recent press releases you stated that you intend to pursue certain "strategic alternatives". I therefore hope and trust that if there is any question that these "strategic alternatives" might in any way impede a future Microsoft merger you will at the very least allow shareholders to opine on them before embarking on such a transaction. I sincerely hope you heed the wishes of your shareholders and move expeditiously to negotiate a merger with Microsoft, thereby making a proxy fight unnecessary. Sincerely yours,
CARL C. ICAHN
SLATE BIOGRAPHIES Lucian A. Bebchuk Lucian Bebchuk is the William J. Friedman and Alicia Townsend Friedman Professor of Law, Economics, and Finance and Director of the Program on Corporate Governance at Harvard Law School. Bebchuk is also a Research Associate of the National Bureau of Economic Research and Inaugural Fellow of the European Corporate Governance Network. Trained in both law and economics, Bebchuk holds an LL.M. and S.J.D. from Harvard Law School and an M.A. and Ph.D in Economics from the Harvard Economics Department. He joined the Harvard Law School faculty in 1986 as an assistant professor, becoming a full professor in 1988, and the Friedman Professor of Law, Economics and Finance in 1998. Bebchuk has written extensively on corporate governance, corporate control, and corporate transactions. He has published more than seventy research articles in academic journals in law, economics, and finance. Upon electing him to membership in 2000, the American Academy of Arts and Sciences cited him as "[o]ne of the nation's leading scholars of law and economics," who "has made major contribution to the study of corporate control, governance, and insolvency." He is the 2007-2008 President of the American Law and Economics Association, and a former chair of the Business Association Section of the American Association of Law Teachers. Bebchuk's recent writings include Pay without Performance: the Unfulfilled Promise of Executive Compensation (Harvard University Press, 2004, co-authored with Jesse Fried), "The Case for Increasing Shareholder Power" (Harvard Law Review, 2005), "The Costs of Entrenched Boards" (Journal of Financial Economics, 2005, co-authored with Alma Cohen), and "The Myth of the Shareholder Franchise" (Virginia Law Review, 2007). Bebchuk has been a frequent contributor to policy making and public discourse in the corporate governance area. He has appeared before the Senate Finance Committee, the House Committee of Financial Services, and the SEC. He has published many op-ed pieces, including in the Wall Street Journal, the New York Times, and the Financial Times. He was included in the list of "100 most influential people in finance" of Treasury & Risk Management and the list of "100 most influential players in corporate governance" of Directorship magazine. Frank J. Biondi, Jr. Since March 1999, Mr. Biondi has served as Senior Managing Director of WaterView Advisors LLC, an investment advisor organization. From April 1996 to November 1998, Mr. Biondi served as Chairman and Chief Executive Officer of Universal Studios, Inc. From July 1987 to January 1996, Mr. Biondi served as President and Chief Executive Officer of Viacom, Inc. Mr. Biondi is a director of Amgen Inc., Cablevision Systems Corp., Hasbro, Inc., The Bank of New York Mellon Corporation and Seagate Technology. Mr. Biondi is a graduate of Princeton University and earned a Masters of Business Administration from Harvard University. John H. Chapple John Chapple is President of Hawkeye Investments LLC, a privately-owned equity firm investing primarily in telecommunications and real estate ventures frequently working in conjunction with Rally Capital LLC. Prior to forming Hawkeye, John Chapple worked to organize Nextel Partners, a provider of digital wireless services in mid-size and smaller markets throughout the U.S. He became the President, Chief Executive Officer and Chairman of the Board of Nextel Partners and its subsidiaries in August of 1998. Nextel Partners went public in February 2000 and was traded on the NASDAQ Exchange. In June 2006, the company was purchased by Sprint Communications. From 1995 to 1997, Mr. Chapple was the President and Chief Operating Officer for Orca Bay Sports and Entertainment in Vancouver, B.C. During Mr. Chapple's tenure, Orca Bay owned and operated Vancouver's National Basketball Association and National Hockey League sports franchises in addition to the General Motors Place sports arena and retail interests. From 1988 to 1995, he served as Executive Vice President of Operations for McCaw Cellular Communications and subsequently AT&T Wireless Services following the merger of those companies. From 1978 to 1983, he served on the senior management team of Rogers Cablesystems before moving to American Cablesystems as Senior Vice President of Operations from 1983 to 1988. Mr. Chapple, a graduate of Syracuse University and Harvard University's Advanced Management Program, has 26 years of experience in the cable television and wireless communications industries. Mr. Chapple is the past Chairman of Cellular One Group and CTIA-The Wireless Association, past Vice-Chairman of the Cellular Telecommunications Industry Association and has been on the Board of Governors of the NHL and NBA. Mr. Chapple serves on the Syracuse University Board of Trustees currently as Chairman and the Advisory Board for the Maxwell School of Syracuse University. He is also on the Board of Directors of Cbeyond, Inc., a publicly traded Atlanta-based integrated service telephony company; Seamobile Enterprises, a privately held company providing integrated wireless services at sea; Telesphere, a privately held VOIP (voice over internet protocol) company based in Phoenix, Arizona; and on the advisory boards of Diamond Castle Holdings, LLC, a private equity firm based in New York City and the Daniel J. Evans School of Public Affairs at University of Washington. Mark Cuban Since early 2000, Mr. Cuban has been the majority and controlling owner of the National Basketball Association franchise, the Dallas Mavericks. In 2001, Mr. Cuban co-founded HDNet, an all high-definition television network on DIRECTV that broadcasts high-definition sports, movies and other entertainment. Prior to his purchase of the Dallas Mavericks, Mr. Cuban co- founded Broadcast.com in 1995 and served as its Chairman of the Board until it was sold to Yahoo! in July of 1999. Before Broadcast.com, Mr. Cuban co-founded MicroSolutions, a national systems integrator, in 1983, which was later sold to CompuServe Corporation in 1990. Mr. Cuban is an active investor in cutting- edge technologies and various industries, including the entertainment industry. Adam Dell Since January 2000, Mr. Dell has served as the Managing General Partner of Impact Venture Partners, a venture capital firm focused on information technology investments. He also serves as Managing Director at Steelpoint Capital Partners, a private equity firm with offices in New York and California. From October 1998 to January 2000, Mr. Dell was a Senior Associate and subsequently a Partner with Crosspoint Venture Partners in Northern California. From July 1997 to August 1998, he was a Senior Associate with Enterprise Partners in Southern California. From January 1996 to June 1997 Mr. Dell was associated with the law firm of Winstead Sechrest & Minick, in Austin, Texas, where he practiced corporate law. Mr. Dell's investments include: Buzzsaw (which was acquired by Autodesk), HotJobs (which was acquired by Yahoo!) and Connectify (which was acquired by Kana Software). Mr. Dell has been a director of XO Holdings, Inc., a telecommunications services provider, since February 2006, and of its predecessor from January 2003 to February 2006. In addition, Mr. Dell currently serves on the boards of directors of the Santa Fe Institute, MessageOne and OpenTable. He also teaches a course at the Columbia Business School on business, technology and innovation and is a contributing columnist to the technology publication, Business 2.0. Mr. Dell received a J.D. from University of Texas and a B.A. from Tulane University. Carl C. Icahn Mr. Icahn has served as chairman of the board and a director of Starfire Holding Corporation, a privately-held holding company, and chairman of the board and a director of various subsidiaries of Starfire, since 1984. Since August 2007, through his position as Chief Executive Officer of Icahn Capital LP, a wholly owned subsidiary of Icahn Enterprises L.P., and certain related entities, Mr. Icahn's principal occupation is managing private investment funds, including Icahn Partners LP, Icahn Partners Master Fund LP, Icahn Partners Master Fund II L.P. and Icahn Partners Master Fund III L.P. Prior to August 2007, Mr. Icahn conducted this occupation through his entities CCI Onshore Corp. and CCI Offshore Corp since September 2004. Since November 1990, Mr. Icahn has been chairman of the board of Icahn Enterprises G.P. Inc., the general partner of Icahn Enterprises L.P. Icahn Enterprises L.P. is a diversified holding company engaged in a variety of businesses, including investment management, metals, real estate and home fashion. Mr. Icahn was chairman of the board and president of Icahn & Co., Inc., a registered broker- dealer and a member of the National Association of Securities Dealers, from 1968 to 2005. Mr. Icahn has served as chairman of the board and as a director of American Railcar Industries, Inc., a company that is primarily engaged in the business of manufacturing covered hopper and tank railcars, since 1994. From October 1998 through May 2004, Mr. Icahn was the president and a director of Stratosphere Corporation, the owner and operator of the Stratosphere Hotel and Casino in Las Vegas, which, until February 2008, was a subsidiary of Icahn Enterprises L.P. From September 2000 to February 2007, Mr. Icahn served as the chairman of the board of GB Holdings, Inc., which owned an interest in Atlantic Coast Holdings, Inc., the owner and operator of The Sands casino in Atlantic City until November 2006. Mr. Icahn has been chairman of the board and a director of XO Holdings, Inc., a telecommunications services provider, since February 2006, and of its predecessor from January 2003 to February 2006. Mr. Icahn has served as a Director of Cadus Corporation, a company engaged in the ownership and licensing of yeast-based drug discovery technologies since July 1993. In May 2005, Mr. Icahn became a director of Blockbuster Inc., a provider of in-home movie rental and game entertainment. In October 2005, Mr. Icahn became a director of WestPoint International, Inc., a manufacturer of bed and bath home fashion products. In September 2006, Mr. Icahn became a director of ImClone Systems Incorporated, a biopharmaceutical company, and since October 2006 has been the chairman of the board of ImClone. In August 2007, Mr. Icahn became a director of WCI Communities, Inc., a homebuilding company, and since September 2007 has been the chairman of the board of WCI. In December 2007, Mr. Icahn became a director of Federal-Mogul Corporation, a supplier of automotive products, and since January 2008 has been the chairman of the board of Federal-Mogul. In April 2008, Mr. Icahn became a director of Motricity, Inc., a privately-held company that provides mobile content services and solutions. Mr. Icahn received his B.A. from Princeton University. Keith A. Meister Since March 2006, Keith Meister has served as Principal Executive Officer and Vice Chairman of the Board of Icahn Enterprises G.P. Inc., the general partner of Icahn Enterprises L.P., a diversified holding company engaged in a variety of businesses, including investment management, metals, real estate and home fashion. Since November 2004, Mr. Meister has been a Managing Director of Icahn Capital LP, the entity through which Carl C. Icahn manages third party private investment funds. Since June 2002, Mr. Meister has served as senior investment analyst of High River Limited Partnership, an entity primarily engaged in the business of holding and investing in securities. Mr. Meister also serves on the boards of directors of the following companies: XO Holdings, Inc., a telecommunications company; WCI Communities, Inc., a homebuilding company; Federal-Mogul Corporation, a supplier of automotive products; and Motorola, Inc., a mobile communications company. With respect to each company mentioned above, Carl C. Icahn, directly or indirectly, either (i) controls such company or (ii) has an interest in such company through the ownership of securities. Mr. Meister received an A.B. in government, cum laude, from Harvard College in 1995. Edward H. Meyer Mr. Meyer serves as Chairman, Chief Executive Officer and Chief Investment Officer of Ocean Road Advisors, Inc., an investment management company. From 1970 to 2006, he served as Chairman, Chief Executive Officer and President of Grey Global Group, Inc., a multi-billion dollar global advertising and marketing agency. Mr. Meyer serves as a Director of Harman International Industries, Inc., Ethan Allen Interiors, Inc., National CineMedia, Inc. and NRDC Acquisition Corp. Mr. Meyer holds a B.A. in Economics from Cornell University. Brian S. Posner Brian S. Posner is a private investor. From 2005 through March 2008, he served as Chief Executive Officer and co-Chief Investment Officer of ClearBridge Advisors LLC (and its predecessor company, CAM North America), an asset management company based in New York with approximately $90 billion in assets and a wholly owned subsidiary of Legg Mason Inc. Prior to ClearBridge Advisors, he was a co-Founder and the Managing Partner of Hygrove Partners LLC, a hedge fund company that was formed in 2000. Prior to ClearBridge Advisors and Hygrove Partners, he served as a Portfolio Manager and an Analyst, first at Fidelity Investments from 1987 to 1996 and then at Warburg Pincus Asset Management/Credit Suisse Asset Management from 1997 to 1999. At Warburg Pincus Asset Management/Credit Suisse Asset Management he was a Managing Director and served as the Senior Investment Manager of the Value Equity Group, co-Portfolio Manager of the Warburg Pincus Growth & Income Fund, and Portfolio Manager of the Warburg Pincus Institutional Value Fund and the Warburg Pincus Trust, Growth and Income Fund. Prior to the acquisition of Warburg Pincus Asset Management ("WPAM") by Credit Suisse Asset Management in July 1999, he was co-Chief Investment Officer, Director of Research, Chairman of the Global Asset Allocation Committee, and a member of the Executive Operating Committee at WPAM. At Fidelity Investments, he was the Portfolio Manager of the Fidelity Equity Income II Fund from 1992 to 1996 and the Fidelity Value Fund from 1990 to 1992. He also managed the Select Life Insurance, Select Property Casualty Insurance and Select Energy Portfolios. From 1987 to 1990, he was an Oil, Insurance, and Financial Services Analyst. From August 2000 to April 2003 he served on the Board of Directors for Sotheby's Holdings, Inc. He currently a member of the Board of Trustees at Northwestern University and the Board of Visitors for the Weinberg College of Arts and Sciences at Northwestern University. Mr. Posner received his undergraduate degree in history from Northwestern University in 1983 and his M.B.A. in finance from the University of Chicago Graduate School of Business in 1987. Robert K. Shaye Robert Shaye is Co-Chairman and Co-CEO of New Line Cinema. As the Founder of New Line Cinema and a filmmaker himself, Robert Shaye has spent more than 40 years developing and distributing films that reflect a wide array of cultural movements, creating new paradigms for the motion picture business, and most importantly, entertaining millions of moviegoers. Since he founded New Line in 1967, Shaye has guided the company's growth from a privately-held art film distributor to one of the entertainment industry's leading independent studios and a veritable box office force. He has been involved in such films as The Lord of the Rings trilogy, Rush Hour, Austin Powers and Seven. A University of Michigan graduate with a degree in business administration and a J.D. degree from Columbia University Law School, Shaye is also a Fulbright Scholar, member of the New York State Bar, and serves on the Board of Trustees of the Motion Picture Pioneers, and the American Film Institute.
Posted by Kevin Newcomb at 11:42 AM | Permalink | Comments (0)
May 9, 2008
Yahoo! Acquires Assets of the Inquisitor 3 Plug-in for SafariYahoo has acquired the assets of the Inquisitor 3 plug-in for the Safari web browser. Mac developer Dave Watanabe created the plug-in, but will not become a Yahoo! employee. Watanabe will, however, temporarily consult for Yahoo.
Inquisitor 3 aids searchers by auto-completing their search keywords and delivers results directly in the Safari browser. When users begin to type in the chrome (you know, that area where the toolbars and menus are), websites and alternative search terms pop up to assist the searcher. Yahoo says the plug-in is similar to their Search Assist-type function, but within the chrome.
Posted by Nathania Johnson at 11:00 AM | Permalink | Comments (1)
SEW Experts: Yahoo Rejects Microsoft: Worst Decision Ever?There have been some major missed opportunities in our industry; decisions that must haunt those involved. Arguably the biggest faux pas of our industry came in 1999, when Excite had the opportunity to buy Google for $1 million and refused. In today's SEM Crossfire column, "Yahoo Rejects Microsoft: Worst Decision Ever?," Frank Watson wonders if Yahoo's turn-down of Microsoft's offer could trump it?
Posted by Kevin Newcomb at 12:00 AM | Permalink | Comments (0)
May 4, 2008
Microsoft-Yahoo Mashup Scrapped: Hidden Winners and LosersOn Saturday, Microsoft formally withdrew its proposal to acquire Yahoo. With the Microsoft-Yahoo mashup scrapped (for now), who are the hidden winners and losers?
I’m not talking about the stockholders, advertisers, employees, CEOs, management teams, boards of directors or other stakeholders of Google, Yahoo or Microsoft. They are the obvious winners and losers.
No, I’m talking about the hidden winners and losers – or, at least the ones that have been hidden in plain sight. I may have missed some. I’ve been busy. (I’ve got a day job.) But, here are the ones I was able to find on Sunday:
Hidden Winners of the Scrapped Microsoft-Yahoo Mashup
The biggest hidden winner is AP photographer Mark Lennihan. His May 4, 2007 file photo of a Times Square news ticker flashing a headline about Microsoft above a billboard for Yahoo became one of the most used images in Google News to illustrate stories about Microsoft’s unsolicited bid for Yahoo.
Another hidden winner is the Flickr group photo pool, "Microsoft: Keep You Evil Grubby Hands Off Our Flickr." Its About Us statement reads, “THIS GROUP WILL STOP MICROSOFT FROM BUYING YAHOO! AND DESTROYING THE FLICKR WE KNOW AND LOVE OR WE WILL DIE TRYING.” Put down the camera, son. It’s over.
Kevin Ryan on the Microsoft Yahoo bid (Associated Press)
The final hidden winner is Kevin Ryan, the global content director for Search Engine Strategies and Search Engine Watch. His comments to AP on what the possibility of a Microsoft-Yahoo conglomerate means for the online marketplace ranks #1 in YouTube if you search for the two-word term, Microsoft Yahoo.
Hidden Losers of the Scrapped Microsoft-Yahoo Mashup
The biggest hidden loser is the Y-Que T Shirt Superstore. While it ranks #1 in Google Product Search for MicroHoo, that wasn’t as popular at term as "Microsoft Yahoo," according to Google Trends. And now it’s stuck with a bunch of funny t-shirts commemorating the takeover of Yahoo by Microsoft.
Another hidden loser is Kevin Heisler, executive editor of Search Engine Watch. What was he doing Saturday night at 9:59 p.m.? He was posting a story to the Search Engine Watch Blog entitled, “Microsoft Withdraws Yahoo Offer; Yahoo Responds.” He should have been out watching Iron Man, like Deborah Richman.
Steve Ballmer going crazy
The final hidden losers are the Rapid Response Team at Waggener Edstrom Worldwide and the staff at Joele Frank, Wilkinson Brimmer Katcher. Do a search for Steve Ballmer on Google. See the YouTube video of Steve going crazy? I’ve got four words for public relations professionals: Search Engine Reputation Management.
Posted by Greg Jarboe at 3:31 PM | Permalink
April 9, 2008
Yahoo to Test Google Ads – Take That, Mr. Ballmer!Yahoo announced today that it "will begin a limited test of Google Inc.'s AdSense for Search service, which will deliver relevant Google ads alongside Yahoo's own search results."
The test will affect about 3 percent of Yahoo search queries, and will only apply to search traffic from yahoo.com in the U.S. and will not include Yahoo's publisher network or other partners. The test is expected to last up to two weeks.
This can be seen as Yahoo thumbing its nose at Microsoft CEO Steve Ballmer, who basically implied in his ultimatum letter last weekend that Yahoo had no other options than to take Microsoft's offer. But this test is not really an indication of anything concrete, as Yahoo specifically says, "the testing does not necessarily mean that Yahoo will join the AdSense for Search program or that any further commercial relationship with Google will result."
According to the Wall Street Journal, the test is "designed for the two sides to evaluate the revenue potential of a broader search ad outsourcing arrangement. They have been discussing such an arrangement as part of Yahoo's pursuit of alternatives to Microsoft Corp.'s unsolicited acquisition offer, according to people familiar with the matter."
Stay tuned to the ongoing saga of Microhoo. In our next episode, Yahoo will announce that it's teaming up with Apple to put Yahoo ads on the iPhone. At least that's what "people familiar with the matter" have told me.
Posted by Kevin Newcomb at 4:41 PM | Permalink
SEW Experts: Making Yahoocrosoft a RealityThe quibbling of two secondary competitors, while another lengthens its lead, has resulted in the downfall of many in the past. Yahoo and Microsoft would be wise to learn from those past mistakes. In today's Searching for Meaning column, "Making Yahoocrosoft a Reality," Kevin Ryan humbly offers some advice for both sides.
Posted by Kevin Newcomb at 12:00 AM | Permalink
April 7, 2008
Yahoo to Microsoft: We Already Dumped YouAfter Microsoft issued its ultimatum to Yahoo this weekend, giving them three more weeks before things get ugly, Yahoo's board of directors responded this morning, reminding Microsoft CEO Steve Ballmer that it already rejected Microsoft's offer, and Yahoo still thinks Microsoft's offer is too low.
"Our Board's view of your proposal has not changed. We continue to believe that your proposal is not in the best interests of Yahoo! and our stockholders. Contrary to statements in your letter, stockholders representing a significant portion of our outstanding shares have indicated to us that your proposal substantially undervalues Yahoo!. Furthermore, as a result of the decrease in your own stock price, the value of your proposal today is significantly lower than it was when you made your initial proposal."Yahoo's letter says that discussions between the two have been constructive, discussing potential integration and regulatory issues. It also notes that Ballmer was present at two of those meetings.
Yahoo's board insists it is the best group to evaluate a deal, and says that it's not averse to talking to Microsoft, if the price is right: "In conclusion, please allow us to restate our position, so there can be no confusion. We are open to all alternatives that maximize stockholder value. To be clear, this includes a transaction with Microsoft if it represents a price that fully recognizes the value of Yahoo! on a standalone basis and to Microsoft, is superior to our other alternatives, and provides certainty of value and certainty of closing. Lastly, we are steadfast in our commitment to choosing a path that maximizes stockholder value and we will not allow you or anyone else to acquire the company for anything less than its full value."
Read the full text of the letter, after the jump.
Dear Steve:
Our Board has reviewed your most recent letter with regard to the unsolicited proposal you made to acquire Yahoo on January 31, 2008.
Our Board carefully considered your unsolicited proposal, unanimously concluded that it was not in the best interests of Yahoo and our stockholders, and rejected it publicly on February 11, 2008. Our Board cited Yahoo's global brand, large worldwide audience, significant recent investments in advertising platforms and future growth prospects, free cash flow and earnings potential, as well as its substantial unconsolidated investments, as factors in its decision.
At the same time, we have continued to make clear that we are not opposed to a transaction with Microsoft if it is in the best interests of our stockholders. Our position is simply that any transaction must be at a value that fully reflects the value of Yahoo, including any strategic benefits to Microsoft, and on terms that provide certainty to our stockholders.
Since disclosing our Board's position with respect to your proposal, we have presented our three-year financial and strategic plan to our stockholders, which supports our Board's determination that your unsolicited proposal substantially undervalues Yahoo. Those meetings with our stockholders have also provided us an opportunity to hear their views.
We have continued to launch new products and to take actions which leverage our scale, technology, people and platforms as we execute on the strategy we publicly articulated. Today, in fact, we are announcing AMP! from Yahoo, a new advertising management platform designed to dramatically simplify the process of buying and selling ads online.
Finally, our Board has been actively and expeditiously exploring our strategic alternatives to maximize stockholder value, a process which is ongoing. All of these actions have been driven by our overarching commitment to maximize stockholder value.
Our Board's view of your proposal has not changed. We continue to believe that your proposal is not in the best interests of Yahoo and our stockholders. Contrary to statements in your letter, stockholders representing a significant portion of our outstanding shares have indicated to us that your proposal substantially undervalues Yahoo. Furthermore, as a result of the decrease in your own stock price, the value of your proposal today is significantly lower than it was when you made your initial proposal.
In contrast to your assertions about the effect of general economic conditions on our business, Yahoo's business forecasts are consistent with what we outlined in our last earnings call. As you know, we recently reaffirmed our Q1 and full year guidance, which is a testament to our ability to perform in line with our expectations despite the current economic environment. In addition, our three-year financial and strategic plan which we have made public demonstrates significant potential upside not previously communicated to the financial markets. This plan has received positive feedback from our stockholders, further strengthening the view that Yahoo is worth well more as a standalone company than the value offered in your proposal, and would be even more valuable to Microsoft. Your own statements have made clear the strategic importance of Yahoo's substantial assets and capabilities to Microsoft.
We regret to say that your letter mischaracterizes the nature of our discussions with you. We have had constructive conversations together regarding a variety of topics, including integration and regulatory issues. Your comment that we have refused to enter into negotiations to conclude an agreement are particularly curious given we have already rejected your initial proposal, nominally $31 per share at the time, for substantially undervaluing Yahoo and your suggestions in your letter and the media that you are considering lowering the value of your proposal. Moreover, Steve, you personally attended two of these meetings and could have advanced discussions in any way you saw fit.
As to antitrust, we have discussed with you our concerns. Any transaction between us would result in a thorough regulatory review in multiple jurisdictions. As a follow up to a recent meeting among our respective legal advisors we had on this topic, and at your request, we provided to you on March 28 a list of additional information we would need to further our understanding of the regulatory issues associated with any transaction. To date, you have still not provided any of the requested information.
We consider your threat to commence an unsolicited offer and proxy contest to displace our independent Board members to be counterproductive and inconsistent with your stated objective of a friendly transaction. We are confident that our stockholders understand that our independent Board is best positioned to objectively and knowledgeably evaluate our Company's alternatives and to maximize value.
In conclusion, please allow us to restate our position, so there can be no confusion. We are open to all alternatives that maximize stockholder value. To be clear, this includes a transaction with Microsoft if it represents a price that fully recognizes the value of Yahoo on a standalone basis and to Microsoft, is superior to our other alternatives, and provides certainty of value and certainty of closing. Lastly, we are steadfast in our commitment to choosing a path that maximizes stockholder value and we will not allow you or anyone else to acquire the company for anything less than its full value.
Very truly yours, Roy Bostock, Chairman of the Board Jerry Yang, Chief Executive Officer
Posted by Kevin Newcomb at 8:25 AM | Permalink
Microsoft Gets Tired of WaitingMicrosoft is apparently tired of waiting for Yahoo to respond to its unsolicited takeover bid, and has issued a deadline of April 26 for Yahoo to come to terms on an acquisition agreement, or face a hostile takeover. On Saturday, Microsoft CEO Steve Ballmer sent a following letter to Yahoo's Board of Directors, outlining Microsoft's displeasure with Yahoo dragging its feet for the past few weeks instead of jumping into Microsoft's arms.
Given these developments, we believe now is the time for our respective companies to authorize teams to sit down and negotiate a definitive agreement on a combination of our companies that will deliver superior value to our respective shareholders, creating a more efficient and competitive company that will provide greater value and service to our customers. If we have not concluded an agreement within the next three weeks, we will be compelled to take our case directly to your shareholders, including the initiation of a proxy contest to elect an alternative slate of directors for the Yahoo board.Text of the entire letter is after the jump.
Dear Members of the Board:
It has now been more than two months since we made our proposal to acquire Yahoo at a 62% premium to its closing price on January 31, 2008, the day prior to our announcement. Our goal in making such a generous offer was to create the basis for a speedy and ultimately friendly transaction. Despite this, the pace of the last two months has been anything but speedy.
While there has been some limited interaction between management of our two companies, there has been no meaningful negotiation to conclude an agreement. We understand that you have been meeting to consider and assess your alternatives, including alternative transactions with others in the industry, but we've seen no indication that you have authorized Yahoo management to negotiate with Microsoft. This is despite the fact that our proposal is the only alternative put forward that offers your shareholders full and fair value for their shares, gives every shareholder a vote on the future of the company, and enhances choice for content creators, advertisers, and consumers.
During these two months of inactivity, the Internet has continued to march on, while the public equity markets and overall economic conditions have weakened considerably, both in general and for other Internet-focused companies in particular. At the same time, public indicators suggest that Yahoo's search and page view shares have declined. Finally, you have adopted new plans at the company that have made any change of control more costly.
By any fair measure, the large premium we offered in January is even more significant today. We believe that the majority of your shareholders share this assessment, even after reviewing your public disclosures relating to your future prospects.
Given these developments, we believe now is the time for our respective companies to authorize teams to sit down and negotiate a definitive agreement on a combination of our companies that will deliver superior value to our respective shareholders, creating a more efficient and competitive company that will provide greater value and service to our customers. If we have not concluded an agreement within the next three weeks, we will be compelled to take our case directly to your shareholders, including the initiation of a proxy contest to elect an alternative slate of directors for the Yahoo board. The substantial premium reflected in our initial proposal anticipated a friendly transaction with you. If we are forced to take an offer directly to your shareholders, that action will have an undesirable impact on the value of your company from our perspective which will be reflected in the terms of our proposal.
It is unfortunate that by choosing not to enter into substantive negotiations with us, you have failed to give due consideration to a transaction that has tremendous benefits for Yahoo's shareholders and employees. We think it is critically important not to let this window of opportunity pass.
Sincerely,
Steven A. Ballmer Chief Executive Office Microsoft Corp.
Posted by Kevin Newcomb at 1:02 AM | Permalink
March 14, 2008
Microsoft & Yahoo - Shotgun WeddingI have been following the unfolding developments regarding Microsoft/Yahoo since they were announced with only mild interest. This is not because the potential alliance would not have an effect on the industry - clearly it would shake things up quite a bit. But there has been actually very little of interest since the initial buyout proposal. Despite the posturing on all sides, events have unfolded in an entirely predictable manner. In the latest development, Nathania Johnson blogged about Yahoo! Goes on a Date with Microsoft, and wondered if there would be a second date to follow.
To me, there is no drama. This is not a first date - it's a shotgun wedding.
The only reason that two companies with such completely different philosophies and business cultures would even consider such a deal is because they have no choice. Yahoo!Search (Overture/GoTo) was an early innovator in the PPC space, but has clearly fallen behind. Microsoft was late to the party, and is once again finding it hard to establish dominance in the Internet arena (outside of its comfortable desktop monopoly).
There may be more posturing in the next few weeks, with crying, chest beating, and histrionics. But the final act has already been written. The only question to be settled is how many goats and chickens Yahoo will get in the dowry. The alternative for both companies in the search advertising arena is unthinkable: to languish and lose market share as perennial also-rans to Google.
Posted by Tim Ash at 1:46 PM | Permalink
March 6, 2008
SEW Experts: Has Yahoo Lost Its Yodel?It seems like only yesterday that Yahoo was the darling of the Web. Is Jerry Yang really ready to throw in the towel and partner with Microsoft? In today's Building Brand Equity column, "Has Yahoo Lost Its Yodel?," Erik Qualman discusses the daunting task ahead if the proposed acquisition of Yahoo by Microsoft goes through.
Posted by Kevin Newcomb at 12:00 AM | Permalink
March 5, 2008
Yahoo Fires BackYahoo retaliated in the ongoing saga of Microsoft's hostile takeover attempt today by extending the deadline for nominations of its board of directors to some future date 10 days after it announces the date of its annual meeting.
Yahoo is taking its time making that decision, since if there's no annual meeting, there can be no vote by shareholders, bolstered by Microsoft, to replace Yahoo's existing board with a more Microsoft-friendly one. By postponing the possible house-cleaning of the current board, Yahoo also makes it more likely that it can reach a peaceful accord with Microsoft on an acquisition, or find another suitor willing to step in.
The plan could backfire on Yahoo if shareholders see this move as disenfranchising them from the decision to accept Microsoft's offer. Yahoo needs to hold its annual meeting within 13 months of its last one, which took place on June 12, 2007.
Posted by Kevin Newcomb at 9:43 AM | Permalink
Yahoo Desperately Seeking Suitor: Time WarnerYahooo's desperately seeking a suitor. With a Microsoft proxy battle expected soon, Time Warner's emerging as a white knight for the Sunnyvale search engine. Or as a delaying tactic to put off the Yahoo annual shareholder meeting.
Talks between Yahoo and the AOL unit of Time Warner have escalated. Finding an alternative to Microsoft's unwelcome bid remains Yahoo's focus, according to reports this morning in The Wall St. Journal (subscription) and The New York Times.
The deal discussed would combine Time Warner's AOL Internet unit with Yahoo, as we reported on February 1st. Reports of the Yahoo Time Warner AOL talks first emerged on February 10th.
What are the chances? Still a longshot since the buyout by Microsoft is almost inevitable.
The clock's ticking on Microsoft's rejected Feb. 1 offer. At an almost $45 billion value, Yahoo spurned it as undervaluing the company. Now it's worth $41.2 billion.
Who supports the AOL-Yahoo combo? Google, naturally, with a 5 percent stake in Yahoo.
Facebook, with Microsoft as an investor, remains on the sidelines. Facebook founder Mark Zuckerberg hired Google's Sheryl Sandberg yesterday. That brilliant move makes the game more interesting.
For a more in-depth look at Facebook, Google and Yahoo, check out former Yahoo exec Erik Qualman's SEW Experts Brand Equity columns:
Social media and online commerce: Birth of Socialommerce
Why Search is still prehistoric
Why Search is still prehistoric, part 2
Posted by Kevin Heisler at 7:29 AM | Permalink
February 24, 2008
How It Came To This: Virals vs. MicrosoftMicrosoft recently published a letter from Kevin Johnson, President of Microsoft's Platforms & Services Division, to his team. The letter details Microsoft's interest in the Yahoo! merger, and the benefits the company and its employees will gain if the deal goes through. The letter seems to focus entirely on a friendly purchase, though Microsoft has already authorized a proxy fight for Yahoo! NYTimes.com DealBook looks at the letter as a "pep talk" to employees in preparation of a protracted and dirty fight, despite the letter's gentle nature. I'm inclined to agree.
But how did it get to this? How was such a huge, and by many accounts, generous, offer so roundly rejected by Yahoo? Let me propose a novel answer; you're to blame.
Yes, you - the average Flickr user, Digg poster, YouTube browser. You embraced virals that broadcasted the "evil empire" stereotype of Microsoft and directly appealed to Yahoo to either reject the deal--or to hold out for more money. You flooded Flickr with images opposing the purchase, pledging to keep Microsft's "evil grubby hands" off of Flickr. You Dugg a video of Sphigler advising Jerry Yang to pull out an iPhone during his meeting with Microsoft as a negotiating technique. In fact, you Dugg it twice. According to Ran Harnevo, CEO of 5min.com, which created the Sphigler viral (below), the video may have been directly responsible for the decision by Yahoo's board. "I received a mail from someone at Yahoo that everyone had seen the video," he said, "including Jerry Yang."
In short you lived up to your honorific as Time's Person of the Year. You tanked the biggest deal of the decade. At least for now.
Watch more DIY videos on 5min.com
Posted by Eli Feldblum at 5:58 PM | Permalink
February 20, 2008
Microsoft-Yahoo Fight Heats UpMicrosoft's unsolicited bid to acquire Yahoo is heading down an unpleasant path. This week, Microsoft is reportedly undertaking a proxy fight, sending letters directly to shareholders to garner enough support to oust Yahoo's board of directors and replace them with a merger-friendly board. A proxy fight is estimated to cost Microsoft up to $30 billion, but was likely seen as a cheaper alternative for Microsoft than raising its bid price.
"We sent them a letter and said we think that’s a fair offer," Bill Gates, Microsoft’s chairman, told The AP on Monday. "There’s nothing that’s gone on other than us stating that we think it’s a fair offer. They should take a hard look at it."
At the same time, Yahoo's current board has approved retention packages and enhanced severance benefits for all Yahoo employees. The aim is to both keep Yahoos around during the threat of a takeover, as well as to give them a more lucrative way out if the Microsoft acquisition is fulfilled.
As outlined in a Form 8-K filing with the Securities and Exchange Commission, employees would get an enhanced severance package if they lost their job or left for "good reason" within two years of a change of control. An employee exercising the package would get a continuation of base salary and health insurance for 4 to 24 months, depending on job level. Employees will also benefit from accelerated vesting of all stock options, restricted stock units and any other equity-based awards previously granted.
Posted by Kevin Newcomb at 6:02 AM | Permalink
February 11, 2008
Microsoft Won't Take "No" for an AnswerYahoo's board of directors may have spurned its advances, but that's not going to stop Microsoft in its effort to acquire Yahoo. In a statement released this afternoon, Microsoft made it clear that it would continue with its plans, one way or another: It is unfortunate that Yahoo! has not embraced our full and fair proposal to combine our companies. Based on conversations with stakeholders of both companies, we are confident that moving forward promptly to consummate a transaction is in the best interests of all parties.
We are offering shareholders superior value and the opportunity to participate in the upside of the combined company. The combination also offers an increasingly exciting set of solutions for consumers, publishers and advertisers while becoming better positioned to compete in the online services market.
A Microsoft-Yahoo! combination will create a more effective company that would provide greater value and service to our customers. Furthermore, the combination will create a more competitive marketplace by establishing a compelling number two competitor for Internet search and online advertising.
The Yahoo! response does not change our belief in the strategic and financial merits of our proposal. As we have said previously, Microsoft reserves the right to pursue all necessary steps to ensure that Yahoo!’s shareholders are provided with the opportunity to realize the value inherent in our proposal.
Judging by that statement, it seems that Microsoft plans to push its original $31-per-share offer directly to shareholders in an effort to force the Yahoo board's hand.
Posted by Kevin Newcomb at 9:57 PM | Permalink
Yahoo Formally Rejects Microsoft BidAs expected, the Yahoo board of directors has rejected Microsoft's unsolicited bid to acquire the company. In a statement, the board said that the proposal is not in the best interests of Yahoo or its stockholders: After careful evaluation, the Board believes that Microsoft's proposal substantially undervalues Yahoo! including our global brand, large worldwide audience, significant recent investments in advertising platforms and future growth prospects, free cash flow and earnings potential, as well as our substantial unconsolidated investments. The Board of Directors is continually evaluating all of its strategic options in the context of the rapidly evolving industry environment and we remain committed to pursuing initiatives that maximize value for all stockholders.
The board did not mention whether any of the "strategic options" it's exploring include Google or AOL, both of which are rumored to have been in talks with Yahoo to discuss some form of partnership or merger. In a Google-partnership scenario, Yahoo might outsource some or all of its search and search advertising operations to Google. AOL doesn't have its own search index, but licenses Google's, so an AOL tie-up would likely see Yahoo keep its search and search ad operations.
AOL has been investing heavily in advertising technology, adding Tacoda (behavioral targeting), AdTech (ad serving, big in Europe), Lightningcast (video ads), Quigo (contextual ads) and Third Screen Media (mobile ads) to its newly formed Platform A business, built around the base of its Advertising.com ad network.
Posted by Kevin Newcomb at 9:13 AM | Permalink
February 10, 2008
AOL Yahoo Talk Merger - Microsoft RebukedYahoo merges with AOL, saves Time Warner and re-Bewkes Microsoft. That's a best case scenario for Yahoo from investment bank advisers at Goldman Sachs and Lehman Brothers. The i-banks are advising Yahoo on mergers with media and technology firms that might snatch Yang & Co. from the jaws of Microsoft. On Sunday, Siobhan Kennedy and Suzy Jagger of The Times Online (UK) broke the story AOL may emerge as Yahoo's exit strategy from the Microsoft $45 billion (give or take a billion) bid.
An AOL merger leads the pack of deals Yahoo and its i-bank M&A advisers are pursuing. Not long ago Yahoo failed to close a deal for AOL. Now the pressure from Yahoo shareholders won't let up until a Microsoft bid (sweetened or unsweetened) is accepted - or an AOL-sized deal is done. Time Warner CEO Jeff Bewkes would be the big winner.
Google has long been discussed as Yahoo's outsourced search partner (again). The surprise? The House of Mouse has emerged as a possible home for Yahooligans. (The revenge of Terry Semel?)
If you can't bring Hollywood to Yahoo, then move the Yahoo to Hollywood. Any Yahoo tie-up would likely put Disney CEO Bob Iger in the driver's seat, not a bad thing for Yahoo's beleaguered shareholders.
Would an AOL merger somehow increase the value of Yahoo's stock by more than 60 percent? (Microsoft premium: 62 percent) Not likely. Yahoo shareholders have long been asking - to no avail - for a plan to boost YHOO by 25 percent from its 52 week low. So far the Microsoft bid has been the only (un)plan that did.
I mentioned the AOL scenario last Friday morning on a conference call with Oppenheimer senior analyst Sandeep Aggarwal and Oppenheimer's Media & Internet and Enterprise Software teams.
Kevin Lee of Didit joined us on the call, along with Jaideep Singh, CEO of vertical search engine Spock.com and Seth Barnes, senior manager for Edmunds.com, a leading consumer automotive site.
To listen to a replay, the dial-in number is (888) 266-2081 or (703) 925-2533. Replay dates are now thru 2/22/2008 23:59 EST.
Whether the Yahoo AOL portal-saurus merger would work is moot.
Now it's One Deal, One Day.
All this week: Yahoo! on Woot!.
Posted by Kevin Heisler at 11:43 PM | Permalink | TrackBack
February 8, 2008
Decision Time for Yahoo?According to Michael Arrington at TechCrunch, today's the day Yahoo's board will make a decision on how to proceed with Microsoft's takeover bid:
"There are only two options left. Accept the offer in principal, and try to increase the price with no negotiating leverage at all, or do a deal with Google to outsource search advertising and, likely, search itself.The board, we’ve heard, is basically being told by outside advisors to take the Microsoft deal. But we’ve also heard that a contingent of senior executives at Yahoo, who are willing to do literally anything to thwart a Microsoft takeover, are pushing for the Google deal and will present their case at the meeting."
One concern of Yahoos may be losing the company's identity and being assimilated by Microsoft. In an effort to assuage those fears, Microsoft CEO Steve Ballmer gave empty reassurances in an interview with Business Week. "Yahoo, the brand, will live," Ballmer said. He didn't elaborate on that, of course, so it could be anything from Microsoft's premier online brand to a token start page (think Netscape).
Yahoo's Panama platform will not likely be as lucky, if Tarek Najm, adCenter's general manager, has anything to say about it. He told Business Week there was nothing he liked about Panama that he would want in adCenter: "We're the leaders in technology," Najm says. "Ours is better."
Posted by Kevin Newcomb at 8:49 AM | Permalink
February 6, 2008
Yahoo Desperately Seeking SuitorWith limited options, Yahoo board members face increased pressure to accept Microsoft's hostile bid. Yahoo has resisted Microsoft's advances in the past, convincing shareholders a turnaround was just around the corner.
So how much money did Yahoo leave on the table by declining the earlier offer? Microsoft won't publicly reveal the bid. Yahoo CEO Jerry Yang would be loath to share the offer from the company the Valley loves to loathe.
Here's the rumored Microsoft bid made last year: $40 plus per share. That's the number Oppenheimer analyst Sandeep Aggarwal cited in a note to clients, suggesting a potential 26-40 percent upside for investors from the current offer of $31 per share - if Yahoo can negotiate a better deal for its shareholders or find a more suitable suitor.
So who's willing - besides Google - to play white knight to Yahoo's digital damsel in distress?
The knights hardly comprise a round table. Only five companies have been widely reported as possible suitors: AT&T, Comcast, News Corp, Time Warner, and Verizon Communications. None has stepped up to enter the fray. Rupert Murcoch of News Corp publicly stated he didn't plan to prepare a competitive bid.
The Wall St. Journal (subscription) reported this morning that Yahoo's hoping against hope that a rival bidder or a business tie-up with Google would save the day. Google desperately wants to derail the deal, even though their share of searches continue to erode Yahoo's market share.
Mike Arrington of TechCrunch expects shareholders to approve the deal soon.
A Google-Yahoo partnership, though, isn't an ideal solution for Yahoo either. It's not as if Google could sign a noncompete agreement with Yahoo in lines of business Yahoo has strength in: local mobile, e-mail, display advertising, or e-mail.
How much revenue Google would be willing to forego by partnering with Yahoo in search also remains in question. In its quest to index the world's information, Google has become a victim of its own success.
A grizzly bear hug (not even a teddy bear hug) from Ballmer may have squeezed the life from Silcon Valley's once and future king.
Now it seems Google's mouth-to-mouth resuscitation of Yahoo's search business will be the only hope for Yahoo's survival.
Posted by Kevin Heisler at 8:07 AM | Permalink | TrackBack
February 5, 2008
Yahoo! Acquires FoxyTunesWhile all eyes are still focused on Microsoft's proposed purchase of Yahoo!, Yahoo! has already made its first (real) acquisition of 2008 by picking up Israeli-based FoxyTunes, a Firefox plugin that allows you to control a variety of music players from your browser. This was a great purchase for Yahoo!; as I said yesterday, the new search engine battle is going to be for nearly everything but search itself—and music certainly falls into that category.
Yahoo! has a checkered history with music, despite music.yahoo.com drawing in a whopping 25 million uniques a month. Lovers of MusicMatch still can’t forgive Yahoo! for what they did when they acquired the formerly-great player. Yahoo! seems to have since learned its lesson—as evidenced by their hands-off policy with Flickr—and I expect FoxyTunes to remain a great product and even improve under Yahoo! (especially if they add support for FineTune and Deezer). On a whole, especially with this acquisition, Yahoo! dominates the online music space, which makes them an even more attractive target for Microsoft.
On a side note, congratulations to the team behind FoxyTunes, many of whom I’ve met around Israel.
Posted by Eli Feldblum at 4:29 PM | Permalink
February 4, 2008
Just the First ShotUnless you’ve been living in a cave this past week—or at least not reading this blog—you’ve heard about Microsoft’s offer to buy up Yahoo! for $31 a share, for a total of $44.6 billion. John Markoff, of the New York Times, called the moved the “firing the final shot of yesterday’s war”—the war in question being one we all know well: the battle for search advertising.
Nothing could be further from the truth. Buying Yahoo is firing the first futuristic shot in tomorrow’s war; Yahoo! is just the beginning for Microsoft. And the war is not for search advertising space alone; even a combined 34.6% for Microsoft/Yahoo! (assuming no one drops off during the merger) doesn’t compete with Google's 61% (including its major partners). This deal is about much more.
For one, it is about mobile, one of the last frontiers in which Google’s dominance is still tenuous. Google has spent time and made waves developing the Android mobile operating system, but its mobile offerings are relics compared with the new Yahoo! Go 3.0 and Microsoft’s recently-acquired TellMe service. It’s about emerging ad space, like Facebook—of which Microsoft owns a piece and has a 10-year exclusive advertising deal, beating out a Google bid—and advertising exchanges like Right Media, which was acquired by Yahoo!
Google may have video covered online, as it owns most video streams via its acquisition of YouTube and most video searches via its new integrated search bar and rumors of true frame-by-frame video search being developed. Photos, however, are still fair game, with Yahoo! holding on to more than 2 billion photos via its acquisition of Flickr. Blogging is worth fighting for as well. Blogger.com has been given over to spammers, but Windows Live Spaces and Yahoo! 360 both do well, with 45 million users between the two of them.
Microsoft wants Yahoo! for search, but it recognizes the need to lead in every other emerging online market where advertising dollars can be spent. And that means more acquisitions. And lots more shots fired.
Posted by Eli Feldblum at 4:57 PM | Permalink
February 3, 2008
Google Weighs In On Microhoo: It May Be EvilDavid Drummond, Google SVP corporate development and chief legal officer, issued the company's official response to Microsoft's proposed acquisition of Yahoo this afternoon. Essentially, Google's position is combining its two main competitors could be bad for the Internet...even border on evil.
Drummond says in the official Google statement:
"It's about preserving the underlying principles of the Internet: openness and innovation.
"Could Microsoft now attempt to exert the same sort of inappropriate and illegal influence over the Internet that it did with the PC? While the Internet rewards competitive innovation, Microsoft has frequently sought to establish proprietary monopolies -- and then leverage its dominance into new, adjacent markets.
"Could the acquisition of Yahoo! allow Microsoft -- despite its legacy of serious legal and regulatory offenses -- to extend unfair practices from browsers and operating systems to the Internet? In addition, Microsoft plus Yahoo! equals an overwhelming share of instant messaging and web email accounts. And between them, the two companies operate the two most heavily trafficked portals on the Internet. Could a combination of the two take advantage of a PC software monopoly to unfairly limit the ability of consumers to freely access competitors' email, IM, and web-based services? Policymakers around the world need to ask these questions -- and consumers deserve satisfying answers.
"This hostile bid was announced on Friday so there is plenty of time for these questions to be thoroughly addressed. We take Internet openness, choice and innovation seriously. They are the core of our culture. We believe that the interests of Internet users come first -- and should come first -- as the merits of this proposed acquisition are examined and alternatives explored."
Posted by Rebecca Lieb at 5:18 PM | Permalink
February 1, 2008
Yahoo Board, Sans Semel, to Consider Microsoft BidYahoo's board of directors has issued a statement saying it will evaluate Microsoft's unsolicited bid to acquire Yahoo for $44.6 billion. Not surprisingly, the board will be doing so without the input of former CEO and chairman Terry Semel, who stepped down as chairman last night. He was replaced as CEO by founder Jerry Yang back in June, and has been busy staffing up his old Windsor Media venture, though it remains to be seen what form that former investment firm will take. Roy Bostock, who has sat on Yahoo's board since May 2003, was elected to serve as non-executive chairman.
Semel's departure may bode well for a potential Microsoft deal, since he's been vocal in his disdain for such a merger. It also won't hurt that Yahoo's been shedding executives for the past year, so at least some of the potential redundancies are already dealt with.
On a conference call this morning to discuss the acquisition, Kevin Johnson, president of Microsoft's Platforms and Services Division, suggested that Microsoft's offer would be the only one Yahoo could get, given anti-trust concerns that would prevent Google from making an offer. he played on the underdog theme, saying, "The fact is the industry will be better served by having a more credible alternative" in search and advertising.
Posted by Kevin Newcomb at 10:11 AM | Permalink
September 4, 2007
Yahoo to Acquire Behavioral Targeting Ad NetworkYahoo has entered an agreement to acquire BlueLithium, the fifth-largest U.S. ad network, for approximately $300 million in cash. Much of BlueLithium's offering centers on its behavioral targeting technology, including a search retargeting version of its AdPath solution.
BlueLithium will fit into the newly formed Global Partner Solutions division under Hilary Schneider along with recently acquired Right Media. BlueLithium will become a wholly-owned subsidiary of Yahoo. CEO Gurbaksh Chahal will remain with BlueLithium for an undisclosed period through the integration.
Posted by Kevin Newcomb at 6:35 PM | Permalink
July 18, 2007
Yahoo Buys Part of Indian Ad Company TyrooThe purchase of a major portion of Tyroo, the Indian online ad company, is seen as a further push into the fast growing Indian market.
"There are millions of potential advertisers in India, which all the search companies and advertising networks are chasing", George Zacharias, managing director of Yahoo India told InfoWorld.
Yahoo started beta testing its search-based advertising business in India over a year ago and opened it to the public about eight months ago and "so far has a few thousand small advertisers", Zacharias said.
Posted by Frank Watson at 12:29 PM | Permalink
July 16, 2007
Rediff Possible Google, Yahoo Buy To Imrove India PresenceThe value of Rediff India Ltd. - which owns one of India's most popular consumer Internet portals - has been speculated as a possible acquisition by Google and Yahoo by numerous publications recently.
"Talk of the deal is emerging in the context of a general worldwide rebound in the Internet business, and India emerging as a hot story in the global economy with strong growth in both telephone penetration and the Internet in urban areas," the the Hindustan Times reported today.
While Barrons suggested the price of Rediff right now may be too high.
Posted by Frank Watson at 1:18 AM | Permalink
July 13, 2007
Yahoo Closes Right Media DealYahoo announced yesterday that it has closed the acquisition of Right Media that was announced in April. Yahoo had bought a 20-percent stake in the company in October 2006 for less than $45 million, and paid $650 million in cash and stock for the remaining equity interest in Right Media.
Of the remaining big-name acquisitions announced this spring, Google-DoubleClick and Microsoft-aQuantive are still awaiting regulatory approval, and the WPP-24/7 Real Media acquisition closed earlier this month.
Posted by Kevin Newcomb at 2:19 PM | Permalink
May 4, 2007
Yahoo and Microsoft Planning Merger Talks?We've seen plenty of unfounded speculation lately about Google's plans to acquire NBC, or Dow Jones. Now we've got another rumor that Microsoft is asking Yahoo to consider a merger. It's being reported by both the New York Post and the Wall Street Journal, both citing unnamed sources.
The two companies had preliminary talks last year, but that was before Microsoft built its own search ad system, and Yahoo upgraded to Panama. Now there's not a whole lot that a merger would offer either company, at least on the search side. On the content side, it might make a bit more sense, since the two networks draw different demographics. It's not likely that anything will come of these rumors, but stranger things have happened when competitors start getting scared, and merger-mania strikes an industry.
UPDATE: The idea is being discussed all over the blogosphere today, as you can see from the Techmeme coverage.
Forrester's Charlene Li says it's a great idea (on paper at least) for Microsoft, but not so much for Yahoo. She goes on to say it will never work. "Given the messiness of a full out merger – and also the limited benefit it would bring to Yahoo! – I believe that a merger won't be in the works anytime soon. More logical would be partnership agreements where the strengths of each company are shared."
Former Wall Street Analyst Henry Blodgett, in his Internet Outsider blog, says that if the two decide to merge, the best plan would be an immediate spin-off of the combined entity. "If it doesn't, both Yahoo and MSN will die," he says. That seems to defeat the purpose of a merger, though, as Nicholas Carr notes in his Rough Type blog: "Microsoft has come to believe, for instance, that advertising will be central to the software business in the future. It's not going to spin off its ad networks or search functions."
UPDATE 2: The opinions keep coming, with the majority of people appearing to think this deal makes sense on some levels, but would never happen for various reasons:
Mathew Ingram, technology writer for the Globe and Mail in Toronto, says the deal makes sense, but the idea of combining Yahoo with Microsoft is like "two icebergs, roped together": It makes sense when you consider that Microsoft’s search and related assets are running a distant — and I mean distant — third in the market. And Yahoo, for all of its faults, is a big property with a snappy new engine behind its search, which is (theoretically) supposed to close the gap with Google.
That’s the “glass is half full” argument. The half-empty argument is that both Microsoft and Yahoo are lumbering behemoths with hardly an agile bone left in their sclerotic bodies. Most of their problems stem from the fact that they have accumulated immense bureaucracies — a big part of the impetus for Yahoo exec Brad Garlinghouse’s infamous “peanut butter” manifesto — and a collection of legacy businesses that keep getting in the way.
They are like icebergs: not only is nine-tenths of them unseen, but they are slow-moving and difficult to steer. Impressive? Yes. Powerful? No doubt about it. But fast, or nimble or imaginative? No. Roping them together would do nothing but compound their problems.
VC Paul Kedrosky writes in his Infectious Greed blog that "the idea of Microsoft trying to buy Yahoo, while in a sense inevitable, is still desperately difficult." He notes the stark differences in company culture, but says the real issue is that this would be a huge undertaking, and a merger of this size is difficult to complete for those with experience, and next to impossible for those without: [Microsoft] can do the deal, in other words, but the subsequent carnage may be something to behold – which Google might actually end up applauding.
UPDATE 3: The WSJ is now reporting that the talks were going on earlier this year, and have since been called off: Microsoft and Yahoo in recent months discussed a possible merger of the two companies or some kind of match-up that would pair their respective strengths, say people familiar with the situation. But the merger discussions are no longer active, these people say. The two companies may still explore other ways of cooperating.
Well, it was fun while it lasted.
Posted by Kevin Newcomb at 9:27 AM | Permalink
April 30, 2007
Yahoo to Acquire Right MediaYahoo is planning to acquire the remaining 80-percent interest in Right Media, according to a New York Times report. The deal, expected to close by the end of July, will cost Yahoo $680 million in stock and cash.
If Google completes its acquisition of DoubleClick, it will also have an ad exchange for buying and selling display ads on remnant inventory.
Back in October, Yahoo announced that it had acquired a 20-percent stake in the auction-based ad marketplace, and would take a seat on the Right Media Exchange to help monetize its non-premium inventory.
“The acquisition, to us, is a key step toward executing our long-term vision to build the leading advertising and publisher ecosystem both on and off the Yahoo network,” Yahoo CEO Terry Semel told the Times.
Incidentally, this acquisition will apparently bring former Did-It CEO Bill Wise to Yahoo, as he recently joined Right Media to head its Remix Media ad network.
Yahoo has also issued a statement regarding its plans.
UPDATE: While many people are spinning this as a defensive move sparked by Google's planned acquisition of DoubleClick, Forrester analyst Charlene Li points out that this is more of an offensive strike:
"The acquisition makes it difficult for Google/Doubleclick to start its own ad exchange, which Doubleclick announced earlier this month. Right Media has been running its ad exchange for over two years, giving it the management and technical experience to run a successful exchange.""But more importantly, I believe the acquisition puts pressure on Google's AdSense network to be more transparent."
Also, by inserting itself as the broker for both buyers and sellers of ads, Yahoo can outflank Google, with DoubleClick only serving as the delivery mechanism for ads, she said.
Posted by Kevin Newcomb at 12:01 AM | Permalink
January 9, 2007
Yahoo Acquires MyBlogLogYahoo today confirmed the persistent rumors that it would acquire MyBlogLog.
According to Forbes, the deal was worth about $10 million.
MyBlogLog is a tool that allows bloggers to put faces to their community. " If blogging was originally about building a community and having a conversation with people in that community, then MyBlogLog provides the missing link that makes those connections more real," wrote Chad Dickerson, senior director of the Yahoo Developer Network, on Yahoo's Yodel Anecdotal blog.
The move fits Yahoo's increasing focus on using social media as a differentiator, including recent acquisitions of Flickr, del.icio.us and Upcoming.
"Taken together, these vibrant web communities continue to provide Yahoo with a deeper understanding of communities and user activity that reach beyond the Yahoo network," Dickerson said.
MyBlogLog's 5-person team, including CEO Scott Rafer (former Feedster CEO) and founders Eric Marcoullier and Todd Sampson, will join the Yahoo Developer Network group.
Posted by Kevin Newcomb at 9:21 AM | Permalink
December 12, 2006
Yahoo Mid-Year Offer to Buy Facebook RejectedAccording to Michael Arrington at Techcrunch, Yahoo proposed a $1 billion acquisition of the social network Facebook in mid-2006. According to leaked documents, At Yahoo, the long running courtship was internally referred to as “Project Fraternity.”
Posted by Greg Jarboe at 11:39 AM | Permalink
November 21, 2006
Can Developers & API Save Yahoo From Its Peanut Butter CrisisDanny reported yesterday on the internal Yahoo memo that called for Yahoo to make cut backs due to them spreading out the Yahoo resources like peanut butter. In reaction to that Jeremy Zawodny of Yahoo wrote Yahoo's Peanut Butter APIs which is strongly supported by News.com's Yahoo seeks geek credibility. Jeremy argues that APIs are part of the solution to the problem of being "everything to everyone." The News.com article explains that this is part of Yahoo's appeal. I tend to agree with Jeremy's argument, but as he said, "Brad is very right about some things and terribly wrong about others." It is also important to note, as Danny IMed me, "Hey Yahoo! Microsoft Is Jelly To Your Peanut Butter. Make A Sandwich!" More details on that here.
Posted by Barry Schwartz at 9:15 AM | Permalink
November 9, 2006
Google, Microsoft & Yahoo Acquisitions Charted Via VentureBeat, Acquisition Mashup: Google-Microsoft-Yahoo from Shmula is a nice chart listing acquisitions by Google, Yahoo and Microsoft together. Click on any item to learn more about the purchase. I wish there was a way to reduce the font size, so that you could see more of the chart -- or perhaps a way to make it go vertical, rather than horizontal. Still, very cool. Related, see this analysis of some Google acquisitions by Bill over at SEO By The Sea, this list from Wikipedia for Google, this chart for Google from Tristan Louis and this expanded chart based on Tristan's that Philipp at Google Blogoscoped made.Posted by Danny Sullivan at 9:50 AM | Permalink
October 30, 2006
Yahoo To Buy AOL? Sell To Microsoft? Merge With eBay? Or Keep Status Quo?Fortune reports that rumors are spreading that Yahoo is in talks with Time Warner about buying AOL. The article says, "FORTUNE has learned from multiple sources that Yahoo recently approached Time Warner about buying America Online." That rumor was shot down by Time Warner explaining "that there are no active conversations between the two companies." So the article then goes into what-if scenarios. What if Yahoo did buy AOL? What if Yahoo sold out to Microsoft? What if eBay and Yahoo merged? And what if Yahoo kept with the status quo?
Posted by Barry Schwartz at 9:40 AM | Permalink
October 17, 2006
Yahoo Acquires AdInterax Rich Media Advertising CompanyYahoo announced that they have purchased AdInterax, a company that specializes in management of video and animated online ads. AdInterax built tools to float animations, dynamically expandable banners and streaming video ads. Also, Yahoo bought 20 percent of Right Media today, an online advertising company. Yahoo said that the investment will allow it to "offer advertisers the ability to bid on Yahoo's non-premium inventory through an open and transparent marketplace."
Posted by Barry Schwartz at 11:01 AM | Permalink
October 11, 2006
Yahoo Hurting While Google Healthier Than EverThe NY Times has an article named Yahoo’s Growth Being Eroded by New Rivals (free version available at (IHT.com). The article goes through how Yahoo is suffering and lagging behind its competitors. (1) They made a bid at YouTube but those deals broke down, according to the article, and Google "swooped" them up. (2) The new Yahoo search ad system, Panama, is over a year delayed. This "delay has sucked up the company’s engineering resources and prevented it from developing new advertising products."
Based on my coverage of Yahoo over the past year, it seems like webmasters, SEOs, and industry folks have become less and less interested with the company.
The LA Times has an article this morning that goes on the same theme. If you can't get to the article, try going through Google News to gain free access, it worked for me.
Postscript From Greg Sterling:
This is not the kind of publicity you want to see if you're on the PR team. While it's true that Google has momentum and Yahoo may need a kind of "shot in the arm," what people forget is that Yahoo is the largest site on the Internet with the most monthly uniques.It also has a bunch of market-leading properties including mail, finance and local (among others). Mail is also the number one mobile site.
Google, though a very dynamic and powerful company with lots of momentum, is not without its challenges and vulnerabilities. If anything the YouTube acquisition was an admission of some of those. Though, by the same token, Google now has great opportunity with YouTube.
I'm not sure, from where I sit, how many problems identified in the Saul Hansell Times piece are real and how many are simply perceived. But perception does influence reality.
Yahoo is a little like a strong sports team that happens to be in a bit of a slump right now.
Posted by Barry Schwartz at 9:40 AM | Permalink
September 28, 2006
Yahoo Acquires Jumpcut To Add Editing Tools To Yahoo VideoYahoo announced that they have acquired Jumpcut, a company that allows you to create videos by remixing them and then sharing them with friends, who can then remix your videos. Jumpcut has an extensive online toolset to remix videos with their online editing tools. Yahoo said that this acquisition will make "Yahoo Video an even better place for people to create, share, and discover great video online."
Posted by Barry Schwartz at 8:50 AM | Permalink
August 17, 2006
Former Yahoo China Head Sues Yahoo For DefamationReuters reports that Zhou Hongyi, the former head of Yahoo China, has sued Yahoo for defamation. Yahoo said they were about to sue Zhou Hongyi for "unethical business practices." Hongyi has a 40 percent stake in Alibaba.com, which was bought by Yahoo for $1 billion last year. To me, it seems like from the article, that Yahoo finds Hongyi to be a shady character, and Hongyi doesn't like Yahoo telling the public how they feel about him.
Posted by Barry Schwartz at 9:20 AM | Permalink
May 10, 2006
Yahoo En Espaol & Telemundo.com To MergeThe Wall Street Journal reports that Yahoo En Espaol and Telemundo.com will be merging companies. They will be merging the staff and sharing one advertising budget. If you visit http://espanol.yahoo.com/ now, you will find both logos at the top of the page, representing each company. The reason for the merger is because the online Hispanic market is growing extremely quickly and the two companies want to take advantage of "the incredible growth of the Hispanic marketplace," today. It appears that the two companies will fold under the Yahoo umbrella.
We have been reporting on the Hispanic market growth recently. You can find out more by reading here and here.
Postscript: PaidContent.org has some more details on the merger plans.
Posted by Barry Schwartz at 8:45 AM | Permalink
Yahoo En Espaol & Telemundo.com To MergeThe Wall Street Journal reports that Yahoo En Espaol and Telemundo.com will be merging companies. They will be merging the staff and sharing one advertising budget. If you visit http://espanol.yahoo.com/ now, you will find both logos at the top of the page, representing each company. The reason for the merger is because the online Hispanic market is growing extremely quickly and the two companies want to take advantage of "the incredible growth of the Hispanic marketplace," today. It appears that the two companies will fold under the Yahoo umbrella.
We have been reporting on the Hispanic market growth recently. You can find out more by reading here and here.
Postscript: PaidContent.org has some more details on the merger plans.
Posted by Kevin Heisler at 8:45 AM | Permalink
Yahoo En Espaol & Telemundo.com To MergeThe Wall Street Journal reports that Yahoo En Espaol and Telemundo.com will be merging companies. They will be merging the staff and sharing one advertising budget. If you visit http://espanol.yahoo.com/ now, you will find both logos at the top of the page, representing each company. The reason for the merger is because the online Hispanic market is growing extremely quickly and the two companies want to take advantage of "the incredible growth of the Hispanic marketplace," today. It appears that the two companies will fold under the Yahoo umbrella.
We have been reporting on the Hispanic market growth recently. You can find out more by reading here and here.
Postscript: PaidContent.org has some more details on the merger plans.
Posted by Kevin Heisler at 8:45 AM | Permalink
Yahoo En Espaol & Telemundo.com To MergeThe Wall Street Journal reports that Yahoo En Espaol and Telemundo.com will be merging companies. They will be merging the staff and sharing one advertising budget. If you visit http://espanol.yahoo.com/ now, you will find both logos at the top of the page, representing each company. The reason for the merger is because the online Hispanic market is growing extremely quickly and the two companies want to take advantage of "the incredible growth of the Hispanic marketplace," today. It appears that the two companies will fold under the Yahoo umbrella.
We have been reporting on the Hispanic market growth recently. You can find out more by reading here and here.
Postscript: PaidContent.org has some more details on the merger plans.
Posted by Kevin Heisler at 8:45 AM | Permalink
May 3, 2006
Yahoo & Microsoft Have Talked Partnering, MergingI was talking with Kevin Delaney of the Wall Street Journal on Monday about search things in general and mentioned the sense it makes for Microsoft and Yahoo to get together. Microsoft is behind with the core search technology. Yahoo's been struggling to upgrade its paid search service. Let's get these two kids together! And today in the Wall Street Journal, it turns out that there's apparently a faction at Microsoft that wants to do just that.
Via Paid Content, A Microsoft, Yahoo Tie-Up? from the Wall Street Journal has the details. Kevin and colleague Robert Guth write of there being two factions within Microsoft -- the "let's built it ourselves" group that has been in control so far and the "let's acquire" group apparently led by Microsoft senior vice president Hank Vigil.
Vigil is said to have led the failed negotiations to combine MSN with AOL. Frankly, a Yahoo deal makes more sense than that. AOL would have provided existing traffic but not solid search technology. Yahoo provides plenty of traffic, along with core search technology and a healthy, first-hand advertiser base.
What's not to love? Probably the high price of the acquisition, plus whether Yahoo -- especially cofounder Jerry Yang -- would go for it. But apparently it's plausible enough that both companies have talked informally over the past year.
The Wall Street Journal cites the hiring of Steve Berkowitz by Microsoft as perhaps being a tipping point. I'd certainly agree. Steve is the first serious outside person Microsoft has brought in for its battle in the search wars. Bringing him on was a big sign that what Microsoft has been trying to do internally hasn't been working -- and so something radical such as an Ask or Yahoo acquisition might be in order.
The big downside is that such an acquisition would give Microsoft yet another brand to confuse consumers with. After spending hundreds of millions of dollars over the years to push MSN, they've now shifted things behind making the stupid Windows Live brand their flagship. It's stupid for so many reasons. Let me bullet point two major ones:
- Most people I know don't really like the Windows brand. Heck, I'm a Windows person, fairly anti-Mac, but Windows still represents crashes and glitches to me. And this is the label you want to attach to your online services?
- We're moving into a world where the operating system and my web-based services aren't necessarily connected. I love Outlook. I live in Outlook. But online, I might want to sync Outlook with Yahoo or Google's calendar. Forcing me to think -- overtly or indirectly through branding -- that I have to use all your products makes me want to use none of them. Let MSN operate as if it wasn't linked to your operating system or your browser and it will be a stronger service in the long run, not weaker.
So Microsoft's already coping with the confusion of two major brands. Adding in Yahoo further confuses matters, unless they perhaps make a brave, bold move and put everything behind the brand leader in the space, Yahoo.
Meanwhile, via Valleywag, Ballmer defends Microsoft's spending increase from the Seattle Times covers a likely leaked memo from Microsoft CEO Steve Ballmer naming Google as one of the company's chief competitors and requiring further "heavy investments" in search. The goal, which we've heard before, is to create "the web's largest advertising network, giving us an engine that twill enable us to monetize our services and compete against Google."
Ah -- but to compete against Google, you don't need an advertising network. You first need a quality core web search engine, which your heavy investment to date has failed to create. And so back to Yahoo, which has exactly what Microsoft needs, that core technology.
Microsoft's AdCenter May Fail to Topple Google From Dominance from Bloomberg covers how advertisers are getting a more formal look at the MSN adCenter service that Microsoft has rolled out over the past few months. Unlike Microsoft's failure in web search, I'd say adCenter is a big success. The service already has plenty of advertisers using it -- and anecdotally continues to draw lots of praise for its features.
Features ultimately mean little, of course. As the story cites, it's about volume. MSN could have rolled out a terrible product that advertisers would have coped with simply because it was the only way to reach MSN's substantial traffic. But to the company's credit, they did not do that. Instead, they've continued to refine and tweak and take advertiser feedback in a way that has earned them raves I rarely hear recently about the systems at Google or Yahoo. Volume remains key, but the features and wooing still certainly help.
And that brings us back to Yahoo, which has been struggling with an antiquated paid listings toolset. The Counterattack On Google from BusinessWeek covers how Yahoo's "Panama" update to its paid listings system has been progressing over the past two years and is nearing completion. But BusinessWeek correctly summarizes, in my view, the changes are more about bringing Yahoo up to Google's level of features rather than leapfrogging past Google and into features like MSN offers.
It's another argument that makes the idea of Yahoo and Microsoft getting together not wacky at all.
Want to comment or discuss? Visit our Search Engine Watch Forums thread, Yahoo & Microsoft To Combine.
Posted by Danny Sullivan at 9:00 AM | Permalink
Yahoo & Microsoft Have Talked Partnering, MergingI was talking with Kevin Delaney of the Wall Street Journal on Monday about search things in general and mentioned the sense it makes for Microsoft and Yahoo to get together. Microsoft is behind with the core search technology. Yahoo's been struggling to upgrade its paid search service. Let's get these two kids together! And today in the Wall Street Journal, it turns out that there's apparently a faction at Microsoft that wants to do just that.
Via Paid Content, A Microsoft, Yahoo Tie-Up? from the Wall Street Journal has the details. Kevin and colleague Robert Guth write of there being two factions within Microsoft -- the "let's built it ourselves" group that has been in control so far and the "let's acquire" group apparently led by Microsoft senior vice president Hank Vigil.
Vigil is said to have led the failed negotiations to combine MSN with AOL. Frankly, a Yahoo deal makes more sense than that. AOL would have provided existing traffic but not solid search technology. Yahoo provides plenty of traffic, along with core search technology and a healthy, first-hand advertiser base.
What's not to love? Probably the high price of the acquisition, plus whether Yahoo -- especially cofounder Jerry Yang -- would go for it. But apparently it's plausible enough that both companies have talked informally over the past year.
The Wall Street Journal cites the hiring of Steve Berkowitz by Microsoft as perhaps being a tipping point. I'd certainly agree. Steve is the first serious outside person Microsoft has brought in for its battle in the search wars. Bringing him on was a big sign that what Microsoft has been trying to do internally hasn't been working -- and so something radical such as an Ask or Yahoo acquisition might be in order.
The big downside is that such an acquisition would give Microsoft yet another brand to confuse consumers with. After spending hundreds of millions of dollars over the years to push MSN, they've now shifted things behind making the stupid Windows Live brand their flagship. It's stupid for so many reasons. Let me bullet point two major ones:
- Most people I know don't really like the Windows brand. Heck, I'm a Windows person, fairly anti-Mac, but Windows still represents crashes and glitches to me. And this is the label you want to attach to your online services?
- We're moving into a world where the operating system and my web-based services aren't necessarily connected. I love Outlook. I live in Outlook. But online, I might want to sync Outlook with Yahoo or Google's calendar. Forcing me to think -- overtly or indirectly through branding -- that I have to use all your products makes me want to use none of them. Let MSN operate as if it wasn't linked to your operating system or your browser and it will be a stronger service in the long run, not weaker.
So Microsoft's already coping with the confusion of two major brands. Adding in Yahoo further confuses matters, unless they perhaps make a brave, bold move and put everything behind the brand leader in the space, Yahoo.
Meanwhile, via Valleywag, Ballmer defends Microsoft's spending increase from the Seattle Times covers a likely leaked memo from Microsoft CEO Steve Ballmer naming Google as one of the company's chief competitors and requiring further "heavy investments" in search. The goal, which we've heard before, is to create "the web's largest advertising network, giving us an engine that twill enable us to monetize our services and compete against Google."
Ah -- but to compete against Google, you don't need an advertising network. You first need a quality core web search engine, which your heavy investment to date has failed to create. And so back to Yahoo, which has exactly what Microsoft needs, that core technology.
Microsoft's AdCenter May Fail to Topple Google From Dominance from Bloomberg covers how advertisers are getting a more formal look at the MSN adCenter service that Microsoft has rolled out over the past few months. Unlike Microsoft's failure in web search, I'd say adCenter is a big success. The service already has plenty of advertisers using it -- and anecdotally continues to draw lots of praise for its features.
Features ultimately mean little, of course. As the story cites, it's about volume. MSN could have rolled out a terrible product that advertisers would have coped with simply because it was the only way to reach MSN's substantial traffic. But to the company's credit, they did not do that. Instead, they've continued to refine and tweak and take advertiser feedback in a way that has earned them raves I rarely hear recently about the systems at Google or Yahoo. Volume remains key, but the features and wooing still certainly help.
And that brings us back to Yahoo, which has been struggling with an antiquated pai