If you would like to learn more about the Google Yahoo Merger, watch this video from Industry expert Dan Savage. Mr. Savage discusses how Google destroyed his business and the impact that a Google Yahoo Merger could have.

A deal with Microsoft is inevitable and the right thing for everyone:

Yahoo needs someone to teach them how to do PPC right.
Microsoft needs more Internet traffic.
Google can’t get any bigger or they will have a monopoly and legal problems.

(1) If Yahoo would quit monetization (and handing their own properties over for monetization to Google would essentially mean this), this would be bad for the Internet industry. It would mean a monopoly for Google on the crucial part of advertising.

(2) Sure, it would be good for Yahoo in the short term – it’s common knowledge that Google usually performs better on search monetization (”volvo x70 car dealer boston”) , because their entire system is based on search and based on the long tail. This does not mean, however, that Yahoo underperforms all the time. Yahoo’s system – from the old GoTo days – has been built around high-paying keywords with large volume, so they often even outperform Google considerable on those (”car dealer”). Depending on the application, the latter is often more relevant, and the Yahoo in my experience as a publisher has some clear advantages, too.

(3) The move would be bad for Yahoo in the long term. They’d be a publisher without advertising sales. Image TIME Magazine being 100% dependent on an print advertising sales agency which owns a monopoly on advertising sales? Unthinkable! But that’s exactly what would happen. Google would dictate them all terms, policies, usage areas, no matter on how good their contract is phrased.

(4) There is an inherent inventory / conflict of interest problem which Yahoo might not have considered… well, I’m sure they have, but it might have been pushed to the back of their mind in the heat of the moment. We can be pretty sure from publishers’ experiences, stockholder reports with their focus on TAC (traffic acquisition costs) and Google’s general strategic direction that one of Google’s agendas is to funnel more an more advertiser budgets and resources to their own sides opposed to third-party sites. Seeing it from Google’s perspective, it’s of course rational: why have an advertiser spend 1 Million $ on a partner site, where they make like 300-400 K $, and not on their own site, where they reap the entire 1 Million $. This inherent conflict of interest by the way has lead to loads of publishers fleeing DoubleClick after their acquisition by Google, at least that was the recent data from Europe.

So bottom line: Jerry, don’t give in to the temptation to doing it, even if some Citi banker thinks otherwise. You know better why you bought Overture in the first place!!!!

It is also flawed because one of the key values in Yahoo! is it’s reach and advertising system. For short term gain Yahoo! generates some additional cash flow (assuming for one second, although unlikely they get approval) but in the medium to long term they erode their balance sheet and value by devaluing their own IP and system by handing it over to Google. They would also lose their most value employees, engineers by outsourcing in this area.

“Compare Mahaney’s $26 price guess to the Fred Wilson’s informal crowdsourcing approach, which came in at $22. If the markets stay steady, the real price is nearly exactly the mid point between the two.”

Thanks for this brilliant insight. In the future, I’ll use this mid point rule to make my trades . I’ll call up Mark to get his price and then I’ll call up Fred Wilson to get a crowdsourced price and base my decisions on the mid point between the 2.

What could go wrong?

Please Michael stick to blogging.

shows you what good these so called “analysts” are…

he got it wrong and I doubt he has any better insight than anyone else.

Deal ain’t happening, cause Yang does not want it to happen, as anyone with half a brain could have figured out.

case closed.

get another “analyst”, maybe one who can poke his head out of an excel spreadsheet and understands human behavior….

There’s 100% chance continuing to endless speculate as a smokescreen that you have no idea what you are talking about will fool 71.3% of the people 50% of the time.

Less than 0?

- “Yahoo..they have not failed at anything.”
- “Microsoft has done nothing BUT fail the past five years…”
- “IBM needs to buy Microsoft, kill Vista and re-release and update XP, send Ballmer home, sell XBox to Electronic Arts, and put Office 2007 on the web (fully) before 2010 – or else it’s all over folks.”
- “I just think he’s overly caught up in the money-driven environment of his workplace.”

These are some of the funniest comments I’ve ever read on TC.

I disagreed with his previous analysis. Nice to see the Wall Street crowd isn’t any smarter, just paid better.

Here’s what I said about his analysis last week:

http://www.best...icrosoft-google