The Wall Street Journal reports that Microsoft is trying to position itself for a new run for Yahoo’s search business. Microsoft has approached other media companies, asking them to join it in a deal that would ultimately lead to the acquisition of Yahoo.
According to the article, Microsoft has already been in talks with Time Warner and News Corp. As it seems, Microsoft only has an interest in Yahoo’s search engine business and therefore needs another party that will continue Yahoo’s other business units after a breakup. Time Warner’s AOL or News Corp.’s MySpace are be possible partners.
This new attempt at acquiring Yahoo once again shows just how desperate Microsoft is to get into web search big time, which would instantly push Microsoft to the number two spot behind Google in terms of web searches. And Microsoft really needs YHOO’s search business, because otherwise they might never be able to catch up with market leader Google. From my neutral point of view I would say that, despite a possible merger with Yahoo, they might never be able to catch up in any case.
You know, I love Google. I use their search engine and many of their other products, but I still believe that more heated competition will lead to more innovation and more advances in Internet technology in the long run. That’s why I’m still somehow keeping my fingers crossed for MSFT to successfully buy Yahoo.
Google is so successful on the Internet today, it can easily be compared with Microsoft’s market position in the software business. At some point, however, Microsoft has fallen behind with innovating, which they now try to make up for by heavily investing in this space, and I hope the same won’t happen to Google. Higher competition could drive and further motivate Google, or any other company in the search business, to innovate and provide enhanced products not only today, but in the future too.
It’s now official, Yahoo has entered into a non-exclusive search advertising partnership with Google. This decision should make it more difficult for Icahn to sell the company to Microsoft. Personally, I don’t like the idea of the Internet’s two biggest search engines working closer together, because this could be a first step towards a huge monopoly in web search and targeted advertising.
Microsoft/Yahoo could have rivaled Google at some point in the future, but Yahoo/Google will only help Google and put more money into Yahoo’s pockets, hence leaving Microsoft’s Live.com web search further behind.
Here’s the official press release from Google:
Google Announces Non-Exclusive Advertising Services Agreement with Yahoo! in U.S. and Canada
Companies will also Enable Interoperability Between Their Instant Messaging Services
MOUNTAIN VIEW, Calif (June 12, 2008) — Google (Nasdaq: GOOG) today announced that it has reached an agreement that gives Yahoo! the ability to use Google’s search and contextual advertising technology through its AdSense(TM) for Search and AdSense for Content advertising programs. Under the agreement, Yahoo! has the option to display Google ads alongside its own natural search results in the U.S. and Canada. In addition, Yahoo! can serve contextually targeted ads on its U.S. and Canadian web properties as well as on its current publisher partner sites. Yahoo will continue to operate its own search engine, web properties and advertising services.
In addition, Yahoo! and Google agreed to enable interoperability between their respective instant messaging services bringing easier and broader communication to users.
“This commercial agreement provides Yahoo! with the opportunity to deliver more relevant ads to users and provide advertisers and publishers with better advertising technology to help them succeed in their own businesses,” said Eric Schmidt, Chairman and CEO of Google. “This agreement will preserve the competitive and dynamic online advertising space.”
As a result of the agreement, Yahoo! will be able to complement its own advertising program with Google’s advertising technology. As a result, advertisers will be able to better reach consumers, and Yahoo! and its current publisher partners can generate more revenue. Yahoo can use Google’s advertising technology on as many or as few of its search results and content pages as it chooses.
This non-exclusive agreement allows Yahoo! to enter into similar agreements with other advertising providers. In addition, Yahoo! will maintain relationships with its own advertising customers and will continue to rely exclusively on its own advertising program outside of the U.S. and Canada. The agreement has a term of up to ten years: a 4-year initial term and two 3-year renewals at Yahoo!’s option. Financial terms between the two companies were not disclosed.
Although Google and Yahoo are not required to receive regulatory approval of the arrangement before implementing it, the companies have voluntarily agreed to delay implementation for up to three and a half months to give the U.S. Department of Justice time to review the arrangement.
When I just tried to go to Gmail.com I was blocked and got the following error message:
We can’t provide service under the Gmail name in Germany; we’re called Google Mail here instead.
If you’re traveling in Germany, you can access your mail at http://mail.google.com.
Oh, and we’d like to link the URL above, but we’re not allowed to do that either. Bummer.
For general information about Google, please visit www.google.com or www.google.de.
Now, I knew Google hasn’t been allowed to promote its email service under the Gmail name in Germany due to trademark issues, but it had always been possible to access my Gmail account via Gmail.com. Unfortunately, as it seems, Google is now blocking German users from using this domain name so that they will have no choice other than to use the longer, bulky URL above. Alternatively, one can also go to GoogleMail.com, but this is still not as nice as Gmail.com, in my opinion.
The Gmail.com forward is still working for incoming emails, which is good, and I hope Google will continue to offer this @gmail.com to @googlemail.com catch-all function for German users. Otherwise it might result in emails being sent to wrong recipients or not being delivered at all.
Now that Microsoft didn’t buy Yahoo and isn’t going to do so in the future, it is considering new ways to gain share in web search. The company is going to sort of buy share by offering users cash as part of its Cashback program for using its Live.com search engine:
- Search for cashback deals at Live Search cashback. Each time you click a Live Search cashback listing, you’ll find great deals on the product you chose. Your results will clearly list the cashback savings you’ll receive off the store price, and your final bottom-line price that includes tax and shipping costs. Also look for this icon (omitted) when you search for a product on Live Search to find great cashback deals.
- Compare and sort products by the bottom-line price. Click the best deal to go to the store. Everything you buy during that store visit will be eligible for Live Search cashback. On your first time using Live Search cashback, we will ask you for an email address so we can tell you how to quickly set up your free cashback account.
- Keep saving money each time you use Live Search cashback. Every time you make a qualifying purchase, we’ll send you an email to confirm your Live Search cashback savings. When your cashback account reaches a balance of at least $5, you can claim your cold, hard cash.
This is an innovative approach to growing insofar that no other competitor in the search engine market has taken this road before, as far as I can tell. But I’m not convinced that Live Search Cashback will actually work out in the long run and help Microsoft close the gap between Live.com and Google.com. The software giant certainly can afford to give money away to its users, it is sitting on a big pile of cash. The question is, however, whether the incentives offered through Cashback will result in sustainable growth.
I remain skeptical, because I believe Microsoft will need innovative search products in addition to innovative marketing if it wants to seriously compete with the world’s number one search engine Google.
Yahoo has seen many ups and downs in the past weeks. After Carl Icahn launched a proxy campaign against the search engine company last week, it seems that Yahoo gets a chance to get back up again:
Reuters reports that Microsoft has proposed an alternative deal to Yahoo. Apparently, MSFT is not interested in a full acquisition of YHOO anymore, but there might be other ways to work together. Many believe a search advertising joint venture to be a likely alternative, because both companies are looking to gain on market leader Google. At least, a partnership could help Yahoo fight off Icahn’s proxy battle.
However, Reuters quotes an anonymous source saying that the announcement of a possible Microsoft/Yahoo partnership could possibly provoke quite a contrary reaction:
The software giant’s move on Sunday was likely to prompt the billionaire investor to press Yahoo to further pursue a possible alliance with Google (GOOG.O: Quote, Profile, Research), the source said.
“Microsoft is trying to get the milk without buying the cow, and if you look at Icahn’s history, he has never been used that way,” said this person. “He does not want to see Yahoo pushed into some joint venture with Microsoft and is not going to be used to push Yahoo into it.”
Click here for the rest of the article.
Yahoo’s board of directors responded to Carl Icahn, who has been going to replace Yahoo’s board in order to bring the company back to Microsoft for a possible merger. Roy Bostock, chairman of the Yahoo board, said in a letter to Icahn that Carl Icahn was wrong about the fact why Microsoft’s acquisition of Yahoo had failed and that he should therefore not be allowed to take over Yahoo’s board. He also said it was in the best interest of Yahoo’s shareholders to not allow Icahn and his nominees to take control of Yahoo, because Microsoft had abandoned the negotiations with Yahoo and there was no acquisition offer on the table anymore.
Continue reading ‘Yahoo responds to Icahn’
These Internet mergers are widely reported by now, so I’ll quickly point you to reliable sources for the detailed coverage.
1) Ask.com buys Lexico, owner of Dictionary.com
IAC/Ask.com is buying Lexico Publishing Group, which is the owner of generic domains and online businesses Dictionary.com, Thesaurus.com and Reference.com. This will get Ask a great pile of additional unique traffic and make it the ninth biggest destination on the web in terms of the number of visits.
Click here for a detailed article about this acquisition.
2) CBS going to buy CNET
CBS Corp. said it was going to acquire CNet Networks Inc. for about $1.8 billion or $11.50 per share, which represents a 45 percent premium to its closing price on Wednesday. With this timely acquisition CBS wants to expand its reach across the Internet. I have always wondered why CNet has not been acquired earlier, taking into account their top-notch domain portfolio. The company owns many valuable generic domain names such as News.com, MP3.com, TV.com and Search.com inter alia, as well as established websites and online businesses. The acquisition has still to be approved by CNet’s shareholders.
Click here for detailed coverage about this transaction.
Online competitive intelligence service Hitwise yesterday released the latest U.S. search statistics for April 2008. It announced that Google hit an all-time high, accounting for 67.90% of all U.S. searches. This marks a 0.65% increase over March this year and a 2.64% increase over April 2007.
Continue reading ‘Google reaches all-time high’
Only a few days after Microsoft (NASDAQ: MSFT) was reportedly raising its bid for Yahoo (NASDAQ: YHOO) to $33 per share the company now decided to withdraw the offer, according to news by Reuters. The reason being that Yahoo was looking for $37 per share.
“Despite our best efforts, including raising our bid by roughly $5 billion, Yahoo has not moved toward accepting our offer,” Ballmer said in a statement.
“After careful consideration, we believe the economics demanded by Yahoo do not make sense for us, and it is in the best interests of Microsoft stockholders, employees and other stakeholders to withdraw our proposal,” said Ballmer.
To me Yahoo’s decision looks like yet another bad move in the company’s history. Continue reading ‘Microsoft withdraws offer for Yahoo’
As the Wall Street Journal reports, Microsoft is now willing to raise its bid for Yahoo to as much as $33 per share, up from about $29. Apparently, Microsoft wants to avoid the proxy battle its CEO Steve Ballmer had threatened. The $33 bid would still be lower than what Yahoo is looking for (the search company’s executives want to get an offer in the high $30s), so this is far from a done deal. A raised bid would put further pressure on Yahoo, however, and make it more difficult for the company to walk away from the bid as its shareholders might be inclined to support the takeover.
Continue reading ‘Microsoft raising bid for Yahoo?’
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