Microsoft's Bid for Yahoo

I'm sure you've already heard the news of Microsoft's bid to buy Yahoo for a staggering 44.6 billion dollars. It seemed to spread like wildfire across the media. Clearly, the internet business is booming. But like Microsoft in the software business, the only true internet giant is Google. They have far surpassed Yahoo! in their key market of advertising. And then there's Microsoft, late in the market, and trailing behind, struggling to keep up, using cash as leverage.

The internet business is changing the way the software industry works. After the core functionality is created in an internet company, significant upgrades no longer seem like a necessary task. Instead, small increments of change are put online, creating a steady stream of upgrades, fixes, features, and tweaks. This way, users notice changes quicker, and don't have to wait several years, and migrate to an alien product.

In the search based ad-market, Google has a 75% share of the market, while Microsoft and Yahoo combined, have only an 18% share.[1] Microsoft's investment into Yahoo could prove a wise investment, but only if the hard task of integrating the new company into their internet infrastructure is done properly -- a daunting task considering the size of Yahoo.

In the end, the revenue gained from advertisers comes down to the question, "Which services provide better payback in terms of money?" Right now, Google's simple ad-words advertising seems to be the best, with their easy and comprehensive data compilations of who viewed and clicked ads. Another important factor is that Google's ad program seems to be more diversified throughout the internet, with more websites choosing Google ad-words over other forms of advertising.

So in the end, is it a wise buy by Microsoft? I'm really not sure, but one thing is clear, if Microsoft plans to one day make a significant revenue from advertising, their current strategy isn't much better.

What is your opinion on Microsoft's bid for Yahoo?

Sources:
[1]Microsoft Bids for Yahoo: Do Two Losers Make a Winner?

The resurgence of Yahoo!?

The CEO of Yahoo!, Terry Semel, was recently replaced by co-founder Jerry Yang. Many people jumped with excitement at the thought that maybe, after all this time of torture, Yahoo! might be able to turn things around. Even after being sent into a never-ending tail dive by their biggest competitor Google, they're still around at least, right? I for one am hoping for a revival of Yahoo!. I think some good old competition might help kick things up another notch on the internet, and that is when we will start to see some unimaginable technologies evolve for our use.

One major downside is that Jerry Yang hasn't had much experience in dealing with corporate workings. Even though he was CEO of Yahoo! in their 'startup' days, he was never CEO when Yahoo! went public. Even more, according to the London Times, Yang was a big supporter of Terry Semel, and a consultant in some important decisions (I'm assuming one of them to be the rumored failure to buy out Google years back), that left Yahoo! tailing behind Google. So, with that said, there has been some action to merge their search and display advertising departments, and an overall attempt to oil the gears and restructure the company.

I think they need to start taking lessons from the masters, and assign a "cultural manager", someone who keeps things going at Yahoo!, giving the feeling of a startup company, and motivating the employees. One would think that after many years of working for a company, your motivation would start to plummet, especially in the case of a failing company.

With the recent redesign of its advertising platform, Yahoo! is thought to have a boost in sales and start climbing back up as early as this year. So, please Yahoo!, take it slow, steady, reassuringly, and if something as good as Google falls into your lap next time, jump for it!