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Will Yahoo And Microsoft Just Do It? If So, How?

By - April 22, 2009

msftyahoo-tm.jpgYesterday’s news about Yahoo’s layoffs was well received by Wall Street (which seems to love layoffs in every sector except its own), and part of the optimism about Yahoo’s future seems to lay in folks expecting Yahoo and Microsoft to finally get around to doing a search deal. I’ve written over and over that I think the two should do this, but as time goes by and the machine at Microsoft continues to iterate on its own internal search play, I find it harder and harder to see how such a deal actually gets done, at least when it comes to organic search.

Now, I predicted in January this deal would get done, of course, so I kind of have a dog in this fight. But recall how I predicted it would go down:

“Microsoft will gain at least five points of search share in 2009, perhaps as much as 10. This is a rather radical prediction, I know, but hear me out. I think Redmond is tired of losing in this game, and after trying nearly every trick in the book, Microsoft will start to spend real money to grow share (IE, buying distribution), while at the same time listening to the advice of thoughtful folks who want to help the company improve the product. However, search share is half the game, as we know. The second half is monetization, and Microsoft will continue to struggle here, unless it manages to buy Yahoo’s search business. Which it won’t, because….

6. Yahoo and AOL will merge.

7. However, in the second half of the year, Microsoft will buy its search monetization from the combined company.”

That’s some pretty damn specific predictions, now that I think about it, and it depends on a lot of stuff happening that is out of Microsoft’s control (AOL merging with Yahoo!) but I think the idea of combining search monetization efforts still makes sense. Yahoo has tons of distribution. Microsoft has tons of money. Both have a common enemy. We shall see.

Meanwhile, Bartz’s bluntness is still pretty damn provocative. Here’s a quote you have to love if you work in product management at Yahoo:

“We sort of had one product management person for every three engineers, so we had a lot of people running around and telling people what to do, but nobody was doing anything,” Bartz said.

Yow!

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21 thoughts on “Will Yahoo And Microsoft Just Do It? If So, How?

  1. A search ADVERTISING deal makes sense.

    If Microsoft and Yahoo! merge it will be a train wreck for both. One brand will vanish and the other brand will lose search market share.

    We’ve gone through search engine consolidations before and that is what always happens. There is no indication that it would be any different this time around.

    So it makes absolutely no sense for you or anyone else to encourage Microsoft to pursue a merger of search technologies with Yahoo!.

    Microsoft’s real market share is significant that they have earned a solid second place behind Google. If Microsoft stays the course it should be able to challenge Google for search leadership by the end of the year.

    They’ll throw all that away by trying to absorb Yahoo!. Searchers want variety. That is why Google’s real search market share is no better than 40%.

  2. Jason says:

    I was kinda thrilled to see them do it and find out it will be worse than AOL Tim Warner merger. I have no confidence they can really pull it off.

  3. John Cavett says:

    Wow, makes perfect sense to me dude!

    RT
    http://www.anonymity.es.tc

  4. Your article very interesting, I have introduced a lot of friends look at this article, the content of the articles there will be a lot of attractive people to appreciate, I have to thank you such an article.

  5. ajolie11 says:

    If there were some way for the search side of Yahoo to merge with Twitter – that would be Amazing. This would really scare the pants off Google. Getting great search on all real time (as well as historical) tweets would be interesting. Also, you could link Yahoo’s ad serving technology to tweets.

    But you don’t wan’t all the management baggage from Yahoo. That will kill any company.

  6. bgr says:

    I am impressed with Bartz’s ability to read people. As a ex-yahoo I am so pleased abt what she said regarding prod. mgmt there. (PM @ Y! was one of the main reasons I left the company). Morrissey and Slade made a mockery of everything.

  7. reader#1 says:

    of course they can do it, they just need a good condom that first Yahoo!

  8. buknoii says:

    geeez if they want to merge, they should have done it a year ago…yahoo stocks are falling!

    http://encyclopedia.clickdavao.com

  9. SuperCars says:

    I think they should do it because they’re both in the edge and that’s the only way to boost them up a bit.

  10. SuperCars: “I think they should do it because they’re both in the edge and that’s the only way to boost them up a bit.”

    Michael: Sorry. That dog won’t hunt. If Microsoft and Yahoo! merge one of the brands will vanish and that won’t bring any value to the other. We’ve already seen this with other search mergers.

    Yahoo! is a perfect example of how buying up other search brands accomplishes nothing.

  11. Yeah it would be a very smart move on both their parts.

  12. lilykudrow says:

    I dont think they are going to merge.
    Here are some updates:

    http://www.techunits.com/content/list/windows

  13. Boniko says:

    And who is this good and who is wrong? The one who thinks this or who has the money?

  14. kim says:

    Both Yahoo and Microsoft are really struggling right now and are losing advertisers while Google is now getting them back, see:
    http://adquants.com/Insights-YahooSearchAdvertising.php
    http://adquants.com/Insights-MicrosoftSearchAdvertising.php
    With advertisers spending less and both companies under financial pressure, turnaround their search performance is going to be difficult–lots of money out, not a lot coming back in

  15. johnny says:

    Some of these mergers are not good ideas.

  16. this is a really hot subject for us to discuss. i saw this on http://onchannel.net

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