Notes On The News: Will Yahoo!-Soft Drive Down Ad Costs?
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Microsoft has the software. Yahoo! has the ad revenue. Together they can challenge Google. Among the likely winners: online advertisers.
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I love Twitter, but there have been a lot of problems, and this is too much. They're taking it down tonight, for two hours, and we're hot on a big story, and it's developing -- on Twitter. This seems like a bad night for Twitter to go to sleep. (But there probably never is a good night.) I don't think the Twitter guys really understand how much we're doing with their service.  It's been going down a lot lately. And while other people have been complaining about it losing posts, I had never seen it lose one, until yesterday, and now it's losing them regularly, for me too. Read the first three words of this post again.  They raised $5 million, it seems now it's time for them to get the bugs out, hire some people who really understand scaling, if necessary re-implement the system from the ground up. Do whatever is needed to make it as reliable as the other tools we depend on. We need Twitter to work. It's not a fun experiment for us, we're using it.  Jack, Ev, Biz, Fred -- please take note. Postscript: The announcement changed, now they're saying it'll be down on Sunday night. Much better. Thanks!
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Links to the week's topics from search engine forums across the web: Yahoo Reports Slowing Ad Sales - Search Engines Can't Read 301's - Google Mobile Ads - MSN Search Vs Windows Live Search: What's The Difference? - Will Google Penalize for Linking to Non Related Sites? and more.
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Links to the week's topics from search engine forums across the web: Cloaking for Religious Reasons - Is Link-bait Ruining The Web? - Yahoo To Test Image Advertising On Mobile Phones - Shopping Cart Abandonment Rates - The Reality Of SEO, and more.
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Links to the week's topics from search engine forums across the web: New Yahoo Bidding Information - Internet Advertisers Want Sales Not Branding - Strategy Needed for New International Site - Yahoo Integrates Answers Into Search Results, and more.
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Plus: eBay outlines policy on racist language. [News.com Extra]
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Microsoft plans to intensify its pursuit of Yahoo this week when it authorizes a proxy fight to oust Yahoo&#39;s board, meaning the 19-day old acquisition attempt will soon turn a darker shade of ugly, according to The New York Times.The proxy fight will cost Microsoft between $20 million and $30 million, much less than having to significantly up its offer for Yahoo, The Times reported Tuesday morning, quoting anonymous sources.The aggressive move would be consistent with Microsoft&#39;s statements hinting that it&#39;s willing to acquire Yahoo via hostile means if necessary.&#160;Yahoo&#39;s board rejected unanimously Microsoft&#39;s offer, calling it too low.Yahoo declined to comment about The Times&#39; article. Microsoft didn&#39;t immediately reply to requests for comment.On Feb. 1, Microsoft offered to pay $31 per share for half of Yahoo&#39;s outstanding shares in cash -- about $22.3 billion -- and 0.9509 of a Microsoft share for the other half. Microsoft&#39;s half-cash/half-stock offer to Yahoo was valued at about $44.6 billion at the time it was made; Yahoo&#39;s share price was $19.18 at the time.However, the bid&#39;s value has dropped to about $41 billion as the price of Microsoft&#39;s stock has fallen from $32.60 at the time the offer was made. It was trading at $28.77 on Tuesday morning. At the same time, Yahoo&#39;s stock has surged, erasing the bid&#39;s original premium. It was trading at $29.32 on Tuesday morning.In the proxy fight, Microsoft would hire a proxy solicitor to urge Yahoo investors to kick out board directors, The Times reported, adding that all Yahoo directors are up for nomination this year.After investing heavily in recent years in its Internet business and failing to achieve its desired goals, Microsoft is now convinced that it must acquire Yahoo in order to compete against common rival Google, especially in search advertising, the largest online advertising market pie, and one that Google dominates.As of the end of 2007&#39;s third quarter, Google had almost 25 percent of the U.S. Internet advertising market, up from almost 21 percent in 2006&#39;s third quarter, according to IDC. Meanwhile, Yahoo&#39;s share during this period dropped to 11.3 percent from 12.3 percent, while Microsoft&#39;s declined to 5.2 percent from 5.8 percent, according to IDC.In search usage, Google held a commanding 62.4 percent of queries worldwide, followed by Yahoo in a very distant second place with 12.8 percent, according to comScore. Microsoft ranked fourth with 2.9 percent, after Baidu (5.2 percent).Unquestionably, Yahoo would be a major win for Microsoft in the display ad market. In November, Yahoo ranked first in the U.S. in display ad impressions with a 19 percent share, while Microsoft came in third with 6.7 percent, after News Corp.&#39;s Fox Interactive (16.3 percent), according to comScore. Google took seventh place with 1 percent.However, skeptics question whether acquiring Yahoo will yield the expected benefits, considering the complexity of integrating the two businesses, cultures and technology platforms and the fact that Yahoo has had severe internal problems that have stumped its most seasoned executives. In addition, some aren&#39;t sure that a unified Microsoft/Yahoo will have a better chance to compete against Google.Yahoo co-founder and CEO Jerry Yang, who is also on the board of directors, has been urgently looking for and considering alternatives to a Microsoft acquisition soon after Ballmer and company made their bid.Reports -- all attributed to anonymous sources in various media outlets -- have emerged in the past two weeks that Yang has held conversations with Google, AOL and News Corp., exploring various deals that would allow him to reject Microsoft&#39;s offer.The key is that the shareholder value created by a competing deal would have to at least match the value of Microsoft&#39;s deal. Otherwise, Yahoo would make itself liable to shareholder lawsuits that alleged the board had failed to perform its fiduciary duty.So far, as experts have analyzed the potential value to Yahoo of outsourcing its search advertising to Google, merging with AOL or selling a 20 percent stake to News Corp. in exchange for MySpace, the consensus has been that none of those scenarios comes close to matching Microsoft&#39;s offer.
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Yahoo&#39;s board of directors plans to reject&#160;Microsoft&#39;s unsolicited $44.6 billion takeover bid,&#160;The Wall Street Journal reported Saturday, citing as its source &quot;a person familiar with the situation.&quot;According to the report, the source said the Yahoo board has determined that the $31-per-share offer &quot;massively&#160;undervalues&quot; the online services company. In addition, Microsoft&#39;s buyout bid doesn&#39;t take into consideration the business risks that Yahoo would be taking if it entered into an agreement that in the end might not be approved by government regulators, the source told the Journal.According to the Journal, Yahoo&#39;s board intends to send Microsoft a letter on Monday, detailing its position.A Yahoo spokeswoman declined to comment on the report today. &quot;We are not providing details on the board&#39;s review process,&quot; she wrote. &quot;Yahoo&#39;s board is carefully and thoroughly evaluating the Microsoft proposal in the context of all of the company&#39;s strategic alternatives, and will pursue the best course of action to maximize long-term value for shareholders.&quot;Microsoft, which announced its offer for Yahoo on Feb. 1, couldn&#39;t be reached for comment today. The offer is a combined cash-and-stock deal; in announcing the bid, Microsoft said Yahoo shareholders could choose to receive either cash or Microsoft stock, although it added that the total consideration would be equally split between the two forms of payment.Yesterday, published reports said that Yahoo&#39;s board was meeting to discuss the offer.Yahoo is still evaluating other options,&#160;including a search advertising partnership with Google, according to today&#39;s report by the Journal. It also may still be open to a longer negotiation with Microsoft: The Journal said it was told by the source that Yahoo would be unlikely to consider any offers below $40 per share.If so, that would require Microsoft to raise its original offer by at least 29 percent, or about $13 billion. In other words, the cost for Microsoft to become a more credible rival to Google in the search and online advertising markets could start at about $57.6 billion.Google has been doing what it can to scuttle the Microsoft takeover bid, including playing the antitrust card by asking, in a blog post by one of its executives last Monday, whether Microsoft might &quot;attempt to exert the same sort of inappropriate and illegal influence over the Internet that it did with the PC?&quot;Microsoft quickly shot back, issuing a statement saying that a combination of it and Yahoo merger would &quot;create a more competitive marketplace.&quot;(Eric Lai contributed to this story.)Computerworld is an InfoWorld affiliate.
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Also: New business models make upgrading cheaper. See what people are saying on News.com Extra.
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Blog: New $19.95 annual subscriptions will mean ad-free use of Zooomr and some new features.
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December 10, 2004. Making clear its intention to stay a player in the search wars, Yahoo! announced plans this morning to introduce a free, high-speed desktop search tool after the first of the year.
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Blog: Reports start to surface about server downage across several Yahoo properties; is the summer heat to blame?
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Plus: Is Microsoft search engine crawling Google? [News.com Extra]
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The Wall Street Journal reports that no serious bids have emerged to rival Microsoft's $44.6 billion offer for Yahoo. That doesn't mean the company isn't still trying to piece something together.
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The alternative search engine buys Bloglines in a move to compete with the likes of Google and Yahoo. Also: Mitsubishi feels the financial pain of repeated scandals.... EarthLink earnings are up and looking good... and more.
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Yahoo is stepping up its online advertising program with the launch of SmartAds, a behavioral targeting ad campaign which display ads that are tailored for the customers who are more likely to buy the advertised products. Combining Yahoo&#8217;s demographic, geographic and behavioral targeting capabilities with a new patent pending creative ad assembly, Yahoo SmartAds will [...]
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Also: Yahoo: DRM-free music by year's end. Read these stories and more from around the Web on News.com Extra.