Time for Microsoft to Bid For Yahoo! Again?

August 6th, 2008 by Brad Garlin

Since thwarting recent Microsoft buyout and partnership efforts, Yahoo!’s stock price has sunk back to levels not seen since prior to the proposed alliance, a full 50% off of where it had reached during the height of buyout speculation. Yikes. Looks like Yahoo! shareholders were the big losers there.PPC Company

Perhaps it’s time for both sides to calm down, digest the situation and reconsider working together. After all, it sure looks like Yahoo! needs Microsoft’s help just as badly as Microsoft needs Yahoo!.

Let’s take a look at some recent search query data provided by Compete.com and see who really needs who here. When comparing June, 2008 search traffic numbers to those from June, 2007, there was a 12% decline in actual search queries performed at Yahoo! while Google realized a 44% surge in traffic; That is pretty staggering. Microsoft’s search queries increased, but very little. Based on the 9.1 billion searches performed in June, Google currently dominates search market share receiving 69% of all search queries, followed by Yahoo! with 19% and Microsoft with 8%.

Yahoo!’s one time search query empire has been gradually deteriorating as Google takes over the market. Yahoo! is dominant in other areas, but could certainly use strategic and financial support from Microsoft. Microsoft could be a great ally in trying to prevent Google from further expanding their reach into all areas of technology. I do not necessarily think a buyout is the best solution, though it might be, but I sure think a partnership like the one that had been previously discussed might be wise.

Microsoft needs to increase its Internet presence in order to survive in the future and Yahoo! offers a unique opportunity. Google is already encroaching on Microsoft’s core software business via their free online applications. Microsoft is well aware of Google’s threat in various areas and must do something soon. With Yahoo!’s stock price back to pre-discussion levels and the influence of Carl Icahn who now sits on Yahoo!’s Board of Directors, renewed talks would certainly not surprise me.

Google has already prepared an argument regarding the possibility of Yahoo! and Microsoft partnering, which is a bit ironic since Google has gone on to partner with Yahoo! themselves. We’ll still have to see if the Department of Justice decides to let that deal go through. Until then, I suggest that the powers that be at Microsoft and Yahoo! regroup and reconsider. Hey guys, you both need to do something. The Google Empire has arrived. Clearly, resisting independently has not been working. Perhaps it’s time to try something new.

PPC Advertising News – MicroHoo! Marriage?

July 7th, 2008 by Brad Garlin

This morning’s news forced me to table my prepared blog in order to mention the latest twist in the Yahoo! saga. As suggested in an earlier blog, a Microsoft – Yahoo! arrangement is potentially back on the table. Earlier today, Microsoft said it would be willing to reopen talks to buy all or part of Yahoo!, but only if the current Yahoo! Board of Directors is replaced at the upcoming Yahoo! shareholder meeting on August 1st.PPC Advertising News

Per a Microsoft statement, “In the past week we have had the opportunity to discuss with Carl Icahn the prospects for a possible agreement between Microsoft and Yahoo!. Despite working since January 31 of this year, as well as in the early part of last year, we have never been able to reach an agreement in a timely way on acceptable terms with the current management and Board of Directors at Yahoo!. We have concluded that we cannot reach an agreement with them. We confirm, however, that after the shareholder election Microsoft would be interested in discussing with a new board a major transaction with Yahoo!, such as either a transaction to purchase the “Search” function with large financial guarantees or, in the alternative, purchasing the whole company.” That sure sounds a lot different than “We’re not interested in buying Yahoo!,” stance recently taken by Microsoft CEO Steve Ballmer.
 
This also comes on the heels of last week’s news that Yahoo! is potentially involved in talks with Time Warner and News Corp regarding potential alliances, mergers or partnerships.

Yahoo! has a unique asset. Yahoo! CEO & Founder Jerry Yang knows it. Carl Icahn knows it. Microsoft knows it too. The plot thickens. Will Jerry Yang be able to keep his baby independent or is Yahoo!’s destiny to be absorbed by a giant or maybe even get dismantled? Good luck Jerry.

Economic conditions here in the U.S. continue to deteriorate. Last week, the U.S. Bureau of Labor Statistics reported that there was a net loss of 62,000 payroll jobs in June, marking the 6th straight month of job losses, now totaling over 400,000 for the year. On that, my next blog will likely discuss the PPC advertising environment during recession.