I was so damned excited yesterday to see Yahoo preparing to put up a Mel Gibson style Braveheart fight against Microsoft, Google and anyone else that tried to screw with their freedom. But if the reports of Yahoo exploring a merger with AOL are true, this battle could sizzle out quickly and pathetically.
AOL’s great, and I appreciate the effort they are putting into creating quality, cutting edge web services. But AOL plugs none of Yahoo’s holes - no search marketing platform (Google handles that for them). No algorithmic search technology (ditto). And very few actual searches (they have 5% market share, or less).
Now I certainly don’t have the answers Yahoo needs to stay independent and relevant (that’s why I still think the Microsoft deal is going to happen), but making one more big mistake is not going to suddenly turn everything around. If Yahoo wants to take control of AOL’s various properties and users, fine. But they still need to figure out a way to compete with Google.
By the way, the Times is using “A source close to Yahoo!’s thinking” in reporting these rumors. I’m not even sure what that means.
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How sad that would be. I don’t want to see another AOL property again, EVER!
I find it fascinating how much time and energy Yahoo is putting towards trying to stave off the inevitable. If they had put as much energy into their own business, they wouldn’t have become the lost soul they are now.
Jon
“Braveheart” my arse. The execs just want bigger golden parachutes. In mergers like this they always make out like bandits thanks to negotiating tactics like this while actual workers get pay cuts or get fired.
Say it ain’t so, Yang….
On a side note, perhaps Yahoo is looking to deemphasize the search war and focus more on content.
That merger makes absolutely no sense
This one’s obvious.
Who do you think clicks on search ads?
Who wants to bet that on Monday we will be reading “McDonalds And Yahoo To Merge” on TC with a ‘clever’ headline of McYahoo!
Stop reporting every little rumour. Please.
With decisions like those, explains why Yahoo is in the “mess” they are in…unless of course, we all are missing something!
Paul - you got a source on that rumor?
I can only divulge a first name — Ronald.
Yahoo says MSFT is undervaluing YHOO stock price. How is that so when the market shows it was at $19 and MSFT is offering a huge premium. In the deal, MSFT is offering stock also…
based on Yahoo’s thinking, can Microsoft just say that they are offering MSFT stock at the “real” value, just like Yahoo claims they are worth more too. This isn’t 2000 anymore Yahoo. You are a $20 company. Sorry.
Easy - you kinda have a good point
MSFT will up the bid. They have to. Balmer won’t rest easy until he has Yahoo.
MSFT paid a 85% premium for aQuantive. A company who’s stock was at its 4 year HIGH. Why not a 100% premium for a company at its 4 year LOW.
Traffic to Yahoo properties has not declined in that time period, but only increased. If it’s a traffic/eye balls play, Yahoo is DIRT cheap today.
Also, keep in mind that ~$10 of the stock’s value is cash, yahoo japan and alibaba. the asian properties will only grow from here. At $19, Yahoo core is only valued at $9/share.
It would be for advertising.com — the combined company would have huge market share in display advertising. The additional search share wouldn’t be anything to sneeze at either.
Michael: I am Asian. Please post a photo of Genghis Khan instead. TIA.
By the way, are you still coming up for that party next Saturday? Sandy will be there and I think she’s interested…
I just tried Yahoo Search, I hadn’t been there for years. I find it really good, in a direct comparison with Google. I mean, both gave me interesting results on a random query.
My point is: I have a sympathy for any underdog, and Yahoo is one now.
So I’m gonna start using it. If you agree, let’s help them by giving them a second chance.
Maybe Yahoo! thinks a merged Yahoo! will command more money later but for now it delays the MSFT acquisition. But I guess this just is one of the rumours.
Michael, you are so absolutely certain that a Microsoft-Yahoo deal will happen and sound like it’s going to be so incredibly successful and be a godsend to everyone on the internet. Can you just tell us why? Can you play devil’s advocate for just a few minutes?
I mean think about it, the cultures don’t mix, the technological transition doesn’t so smoothly, lots of disgruntled employees flee the sinking ship, advertisers flee to Google and their search share climbs to 80% in 18 months. Shareholders revolt, Ballmer and Yang are run out of town. It’s Time Warner/AOL all over again. Run with it for 5 minutes. Huge mergers don’t work (except for HP/Compaq but then Carly lost her job over that one…are you listening Ballmer?). You just seem so incredibly sure of success and haven’t pondered the possibility of failure. Two companies so totally devoid of innovation, focus and creativity merging? It’s like Amtrak using a jet engine while promising us greater safety!
Anything other than Mugro$oft is fine with me. Even McDonald’s. McYahoo sounds a lot better than Microhoo anyway
It could work… AOL’s more about content and community than search. Yahoo, like it or not is as well. Yahoo’s search is still very popular (though not google), but Yahoo News, Games, Mail, IM, etc. are much higher impact. Integrate in the best that AOL has to offer, and you have a large network of content to cross promote to a large market base.
I think this isn’t about building search, but about building a content portal, and a user services platform.
Google has all this stuff, but is still focused on search. Why go against their strongest point?
largest ad network on the web hands-down if that happens.
Here is the hint: AOL is part of Time Warner, Terry Semel used to run Warner Bros. Studio…
Yep, Terry is back in the game again.
Hollywood needs a Silicon Valley connection real bad, and it’ll probably get it this time.
AOL money is just as green…
It is a mistake to think of Yahoo! as competing for search dominance. As Yahoo! has reiterated several times at this point, their strategy is to become the starting point for the web, not the search engine. Search is only one tool web users need, and Yahoo! has no interest in being the place they come to for it. They would rather be the place people leave from, time and time again.
So, how does a merger with AOL help Yahoo!?
1) Yahoo! maintains its position as the top site on the web. Quantcast shows that adding AOL’s visitors to Yahoo!’s puts Yahoo! at almost 200 million monthly uniques, almost 50% ahead of Google. ComScore data is less exact, since it groups AOL under “Time Warner Network”, but still shows the same trend:
- http://www.quantcast.com/top-sites-1
- http://www.comscore.com/press/.....press=2000
2) Yahoo! becomes the dominant player in IM. Yahoo! Messenger is already interoperable with Windows Live Messenger; adding interoperability with AIM means that they control ~70% of desktop IM client market share(more recent numbers on this are needed, but by the end of 2006 AIM was ~50 million, and both Yahoo! and Microsoft’s were ~20 million), and their clients can talk to everyone else’s. Yahoo! and AOL have both made progress in integrating IM with E-mail, something Microsoft still hasn’t done. As Yahoo! expands its e-mail services into enterprise markets, and enterprises increase their usage of IM, this could be a big deal.
3) Much better integration potential than with Microsoft. After being stuck in Time Warner’s in-fighting old media bureaucracy for so long, I’d imagine that AOL employees would be overjoyed to be brought into an organization that understands and is about the web. There’s also excellent potential for brand integration here:
- Yahoo! is a brand AOL users would be comfortable with.
- It’s a brand that it makes sense for AOL to adopt as it’s been expanding overseas operations(where Yahoo! already has a strong presence).
- The Yahoo! brand offers a graceful way to retire a brand that the tech-savvy have long scorned.
- Go to Yahoo.com, then go to AOL.com. The portals are almost identical. It’s feasible that a full-scale integration of the two properties could at some point take place.
4) There are plenty of other reasons why an AOL/Yahoo! merger has potential. Concentration of content-provider partnerships, joint efforts in mobile services/advertising, online/offline music offerings, and the fact that both are much more youth-friendly brands than MSN or Google. Plus more.
But TechCrunch isn’t paying me to write guest posts in their comments, so that’s all for now.
Now Yahoo is simply trying to prevent the deal by just making excuses
I bet Murdoch is thinking very hard about making an approach of his own.
“By the way, the Times is using “A source close to Yahoo!’s thinking” in reporting these rumors. I’m not even sure what that means.”
I’d be willing to bet that it’s a completely made up rumor or a merger that never went anywhere a year or 10 ago.
Paul@7: TC dreams…DREAMS of being the TMZ of tech gossip. It’s a race to the bottom, all the MBAs know that.
AOL? What happened to ICQ? WinAmp? Netscape?
NetScape! NetScape! NetScape!!!
AOL=Serial Killer
Yes, I work at MSFT, and I’m a Flickr/Del.icio.us junkie, and I love AOL’s Weblogs Inc. But… come on!
The theme with Yahoo with both AOL and Microsoft is a lack of innovation in search. The underreported story is that Yahoo needs a way to steal back search from Google. Doesn’t seem likely. The only real innovation in the entire field is the search application from ManagedQ.
i can’t wait until aol’s crack marketing team starts mailing out the internet on a disk to people……
Oh for the love of… Why is it soooo important to Michael that Yahoo gets bought by Microsoft???!!! Also - what’s with using the Nazi in his article now??
Mike - Do you think it makes sense for Apple to step in for a Y! merger? I’m sure Jobs & co will have an effective search algorithm especially when it’s runs through mac gadgets and boxes… (could you imagine apple taking it away from MS (:
What do you think about box companies, especially one like Tivo with all the user data and build their web/tv channels? what can Sony do with content/services company like Y! ??
I think AOL is making a new web browser. The search location bar can be used to make money (ala Firefox) - Yahoo could be the default engine.
Makes absolutely no sense.
So if Microsoft decide to pay more for Yahoo and assume more debt, what is the likelihood of them laying off more Yahoo! employees? If I worked at Yahoo I wouldn’t like this “bargaining” at all.
Perhaps they already have… see: http://www.thedisciplinedinves.....oo-merger/
Michael’s entry may be crap, but these comments (several of them anyway) are very insightful on this topic.
don’t know what going to happen finally but i think yahoo for sure must take some hints from this video
http://coollinks.indiatimes.co.....oo-5794173
Google is simply a great ad agency that dominates the search space with their fraudulent Pay Per Click model. Yahoo needs to partner with an ad agency that can’t help them monetize their traffic. Yahoo.com is still the #1 most visited site both globally and across the U.S. Yahoo desperately need an advertising and marketing force to help them sell ads. Microsoft is not the answer, but Time Warner may be.
The new website will be Yol.com. I like. Less typing needed
‘And I’ll have that vanilla Ice cream with some Vanilla on it, no syrup thanks’.
This is just downright… BLAH!. AOL? why not merging with the Wenger Swiss Army knife factory, they would be more useful than AOL.
This started like a Star Wars like epic fight, then turned into Saving private Ryan and now it is…a Soap Opera? Yikes. Somebody please save them!.
I called it last week — I disagree that Yahoo needs to compete with Google; I think they are going in a different direction. If they team with AOL, then they have so many weapons in the battle for behavioral display advertising — and access to probably 65% (?) of the eyeballs on the web [via pageviews; just like Google commands that via search queries].
Match them up with the ISPs and you’re doing some real damage with behavioral display advertising.
My call on YAHOO/AOL from last week: http://stevepoland.com/yahoo-a.....-the-face/
Matching up with ISPs: http://www.marketingvox.com/ar.....e=textlink
Techcrunch.com vs Valleywag.com… gossip and rumors - I can’t tell the difference anymore. Techcrunch, please go back to journalistic integrity and less of rumors and gossip.
Michael,
You claim you dont have answers. Have you tried posting your question on Yahoo Answers, soon to be Microsoft Live Crowed Sourced Knowledge Center(tm).
I’m still confused by everyone being so down on Yahoo even trying. Apparently there is room for only one company and if you don’t beat Google you might as well give up. I’d rather see Yahoo try to become the Apple of web portals. Maybe not close to the biggest but influential and with some good products. Maybe they will fail at that but I’d rather it was because they gave it a shot and were beat than because MS just shuts it down.
All the trash talkers should sell their Yahoo stock and buy MS (or Google) stock if you think the winners are all decided. Oh you don’t own any Yahoo stock? Then why do you care what Yahoo does? It can’t be because you care about any of Yahoo’s sites or tools, because MS doesn’t have anything to offer those. I can’t imagine anyone cares who’s server the ads are coming from.
Danger deal goes along my theory!
Oh, this deal will happen, there is already agreement on the name for the combined entity.
AOL + Y! = Y’AOL — as in “y’all come back again soon, ya hear?”
Sounds like a leaky faucet over at Yahoo!…Jerry has put on his poker face therefore I think we should compare him to “Jerry Yang” (World Series Champion) not Mel Gibson..
http://racetalk.wordpress.com/.....nications/
Chris….. Thanks..
I seem to think that there is too much overlap of site design and the need for both to go unnoticed. While it would be a difficult thing to accomplish, the truth is that it may be more palatable to Yang…
http://www.thedisciplinedinves.....oo-merger/
Andrew