Filed under: acquisition, AOL, ask, fragmenting search market, internet marketing, microsoft, ppc, purchases, search engine marketing, search engines, seo, the future of search engine marketing, the future of search engine optimisation, useful article, yahoo | Tags: consolidation, fragmentation., microsoft, msn, purchasing, search engine marketing, yahoo, ysm
Ive finally gotten round to having a little think about the big news story of the week, Microsoft tabling a bid of $44.6 Billion in cash and stock to buy its rival Yahoo. There has been no official comment from Yahoo on the reports but I thought Id document my thoughts on the impace this could have.
The portal market
Yahoo and MSN are the two big players in the portal market, the one stop shop for all you web needs, search engine, web mail, news feed, weather reports, all in one place. This is where Microsoft will gain a massive advantage and pretty much gain complete dominance. Aside from the ISP sites, which gain their visitors through having a default homepage setting in the ISP setup process, Microsoft will have a dominance in this field comparable to Google’s in the search market (more of that in a minute!). So what does this mean to MSN? Well instantly they will take on board the lions share of the portal advertising revenues around the world. Yahoo has built an advertising model which is highly lucrative and brings in a huge amount of revenue each year, utilising the latest behavioural targeting technology to keep online advertising moving forward. MSN obviously has its own advertising model and ideas on how the market is going to advance but they will automatically boost their ad revenues with the purchase. It also sets them up well for the predicted rise in online ad spend over the next few years, from $40 billion to $80 billion if you believe the predictions, dominance in a market this size is a mouth watering prospect.
The search market
This is where it gets really interesting. Microsft has struggled to gain a foothold in the search market since it launched its own PPC model in 2006 and I forecasted in a previous post (Microsoft sets its sights on 40% market share) that a purchase may be on the cards if they were to achieve their targets. The purchase of Yahoo Search Marketing (YSM), if part of the deal, would possibly take their market share into the double figures in the paid search arena. Their system is good at present, the quality of their traffic is good, its just the volume they have been missing. YSM would help boost this and make them a legitimate number 2 in this arena and they undoubtedly have the fire power to make dents in Google’s dominance (see their response here). It does raise the question, what does this mean to search agencies? the market which was due to fragment with the launch of wikia search, AOL breaking out in the US, Ask hinting at the same, is now significantly consolidated if this deal does actually go through. Does this make SEM simpler? Not really but it could be perceived that way, a post for another time I think.
How do they manage it?
This will be interesting, does Yahoo become Microsoft branded? or is it just another property of the technology giant? Does it become Microhoo? Yasoft? Mahoo? or does it become Yahoo – a Microsoft company? and more importantly for internet marketers do they keep the two infrastructures separate, the advertising interfaces, the search algorithms, the display advertising models. This is what will be the key determinant of what this means to the industry and what it means to digital agencies.
Whether the deal goes through remains to be seen, when it goes through is another question yet to be answered. What is undeniable is that it is going to influence the online advertising market significantly, in what way, remains to be seen.
Filed under: acquisition, fragmenting search market, purchases, search engine marketing, search engines, useful article, world domination | Tags: microsoft, msn, search engine dominance, search engine marketing, yahoo
Exciting news in the world of search engine marketing, more thoughts and comments to come when I have the time!
Microsoft offers to buy Yahoo
Microsoft offered to buy Yahoo for $31 per share, a 62 percent premium over Yahoo’s closing stock price on Nasdaq Thursday. Yahoo shares jumped to $30.75 in premarket trading.
Yahoo said the online advertising market is growing rapidly and expected to reach nearly $80 billion by 2010 from over $40 billion in 2007. Yahoo added it is “increasingly dominated by one player,” referring to Web search leader Google.
“We have great respect for Yahoo, and together we can offer an increasingly exciting set of solutions for consumers, publishers and advertisers while becoming better positioned to compete in the online services market,” Microsoft Chief Executive Steve Ballmer said in a statement.
Yahoo was not immediately available for comment.
The company has been losing market share to Google and warned earlier this week that it faced “headwinds” in 2008, forecasting revenue below Wall Street estimates.
On Thursday, Yahoo disclosed that nonexecutive Chairman Terry Semel was leaving the board, ending its formal ties with the former chief executive, who is credited with reviving the company and then losing touch.
Semel, replaced as CEO last June, had faced heavy criticism for failing to move faster to meet both rival Google’s challenge in Web search and advertising and, more recently, the rise of social networking sites such as MySpace and Facebook.
U.S. stock futures jumped on the Microsoft news, which offset a disappointing earnings report from Google late Thursday.
Paul Mendelsohn, chief investment strategist at Windham Financial Services, said a deal made sense.
“Yahoo is having a really tough time competing against Google. Whether it’s a good price, I can’t see anybody else who is going to outbid Microsoft,” Mendelsohn said.
Microsoft said it had identified four areas that would generate at least $1 billion in annual synergies for the combined entity.
Tim Smalls, head of U.S. stock trading at brokerage firm Execution LLC, was less enthusiastic about the benefits of a tie-up.
“Shocking! To me, the premium seems exorbitant, for what is a dwindling business. I personally don’t see how the synergies of Microsoft-Yahoo is going to take on Google,” Smalls said.
(Reporting by Franklin Paul and Tiffany Wu; Editing by Lisa Von Ahn/Jeffrey Benkoe)
Copyright 2008 Reuters
Filed under: AOL, ask, combining paid and natural search, fragmenting search market, holistic search, image search, innovation. search engine marketing, msn, natural search, new products, personalisation, personalised search, personalising search results, search engine marketing, search engine optimisation, search engines, search resources, serp, the future of search engine marketing, the future of search engine optimisation, universal search | Tags: ask.com, google, msn, search engine dominance, search engine marketing, universal search, yahoo
Search engine land reported today the release of some new functional by ask which allows a user to upload their own personal background image for the search engine. The functionality to add a skin to the background has been available since last year but this was only for predetermined images and wasn’t customisable. I like the idea of customising the results page and this is a much simpler solution than Google’s which involves xml information rather than a simple image upload. It is also much more flexible and interesting than msn and yahoo’s offerings which only allow the selection of different colour palletes for the page.
This functionality is just another stage in the battle for search engine supremacy but also for loyalty within internet users through added value. Yahoo had this a long time ago through positioning itself as an information portal and one stop shop for your internet needs (email, news, sport, search…) a similar position taken by MSN. Then Google smashed this with its simplicity and accuracy of results. But even the big G has recognised the need to give people more and through iGoogle struck a balance between information on the page and usability by allowing the user to choose which information feeds they received. The issue at the bottom of all of this is keeping people using your page/engine, setting it as their homepage, and a base for all their online activities. If they can use your site for everything they need online whey would they go elsewhere? The longer a user in on your site, the more searches they do, the more ads they view, the more ads they click, the more money you make! Simple. Expect a lot more releases like in this in the next 12 months as the battle continues.
It’ll take a lot more functionality for Yahoo, Ask or MSN to catch Google but I do know people who now use the Yahoo homepage as they prefer it to Google so there is some movement going on. You can check out the Ask function on the US site here, it is not yet available in the UK.
Filed under: fragmenting search market, innovation. search engine marketing, personalised search, personalising search results, search engine marketing, search engines, search resources, the future of search engine marketing, the future of search engine optimisation, universal search, wiki, wikipedia | Tags: wiki, wikia, wikia search, wikipedia
I had my first look at the Wikia Search alpha today and I have to say the results are absolute pants! To be fair to them the people at Wikia do say the results won’t be great at the moment as the basis of their engine is that of user reviews and not so much algorithmic search, hence results will improve rapidly over time as listings begin to get scored by users. I have to admit that I like the idea of a user ranked search engine, after all, how many websites do you come across which have absolutely no relevance to your search phrase? (my blog ranks rather highly for “search pornsex” for example!) But not only that, a user can make more judgements on things like usability and site layout than a search engine spider which should further help the best websites rise to the top. The process appears relatively simple, hover over a result and a five star scale will appear allowing you to score the result, this will then be used along with the algorithmic properties to determine a websites position. This will be wholly reliant obviously on users picking up on and participating in this ranking process so I will be watching with a lot of interest how the results improve over the coming weeks.Aside from the standard results there is also going to be a section at the top of results reserved for “mini articles” on each subject. According to Wikia “These will vary in purpose according to the circumstance, but the primary uses will be:
- Short definitions
- Disambiguations
- Photos
- See also “
Generated by the users these will obviously take the same form of the Wikipedia pages and will undoubtedly include some Wikipedia content for sections yet to be populated by the new system. Wikia Search undoubtedly has the potential to become the most relevant search engine but the worry, as has been the problem with tagging sites such as digg in recent times, is that people begin to play the system, creating alias accounts to boost their own contents ratings and therefore rank, totally devaluing the whole platform. If Wikia Search really does become the next number one contender to the big G then the temptation to find a “quick win” within its system will grow stronger in line with its visitor stats. At present I believe Wikia plans to get around the duplicate account problem by basing its user on IP address but that doesn’t sound like to much of a robust system to me and I cant imaging it will be long before the spammers have an easy way of beating it.
I may have sounded negative in this post but I honestly hope Wikia Search succeeds, I hate the dominance Google has on the search market. I also love the thought of users producing the search results rather than a piece of software. On this initial offering I think there is a long way to go with the next big pretender.
Filed under: acquisition, fragmenting search market, internet marketing | Tags: google, microsft, msn, searchengine marketing
According to reports from Reuters, Kevin Johnson, Microsoft’s platform and services president, believes the company can gain a 40% share of the search market in the next 3-5 years. This is an ambitious target by anyone’s standards with Google holding a 80% market share at present it is difficult to see how they can achieve this from their own 6% hold at the moment. Apparently they have a “10,20,30,40” plan suggesting this will be a slow build rather than a quick win. It certainly suggests they may be looking at acquisition to help them gain some share, perhaps a purchase of yahoo, and maybe even ask as this would tip them over the double figures mark and make the deficit a lot smaller. It could be a very interesting few years for the market if they are hell bent on achieving their goals as they certainly aren’t short of a bit of cash. Mind you, neither are Google so it would be a very exciting shoot off if it comes to it. Personally I cant see 40% begin achievable unless Google hit the self destruct button and do something which turns people against them.
the fragmentation continues. hopefully the UK will follow suit and AOL will eventually decide to break away completely. the more the smaller providers continue to do this the less of a monopoly Google has and the better it is for people trying to survive in the market.
AOL Launches Private-Label AOL-Only Search Product
by Laurie Petersen, Monday, Apr 9, 2007
AOL TODAY LAUNCHES AOL SEARCH Marketplace, a private-label version of Google AdWords search allowing advertisers to place search ads only within the AOL network.
This marks the first time Google has allowed one of its partners to offer such a service. It is an expansion of a five-year strategic relationship between Google and AOL struck in December 2005 in which Google powered the contextual search ads found on the AOL service.
AOL Search Marketplace is designed to enhance the efforts of display advertisers on the AOL service, allowing it to offer deeper services and strengthen relationships with these advertisers, said Dariusz Pacsuski, vice president of search products for AOL Platforms. It has been tested with about 30 advertisers over the past five months.”
“We have found that there is a significant impact when search and display campaigns are coordinated,” said Mike Kelly, president of AOL Media Networks.
The service also gives AOL a better shot at getting some of the search advertising dollars that have gone to Google. AOL restructured to put a focus on a free ad-supported service last year, and has made online ad sales a top priority. AOL ad sales rose to nearly $2 billion in fourth-quarter 2006, up 49% over the previous year for the period.
“This brings what you can classify as a really strong second-tier player to the table,” said Stephen Chiles, COO of search marketing agency Reprise Media. “Anytime you can get diversity beyond the big three, that’s certainly a positive.”
“You can certainly hope that there will potentially be less spam since it’s a syndicated Google,” added Chiles, a former AOL executive.
Still, the service can only be viewed as a supplemental play because of the AOL volume, he said. According to comScore Media Metrix, AOL has 111 million monthly unique visitors, and search drew 311 million queries in February. Its latest public filing pegged the number of paying AOL domestic subscribers at 13.18 million.
AOL also announced two other search enhancements launching today. AOL Local Search is now in beta incorporating technology from MapQuest. It combines information from AOL’s CityGuide with geotargeted advertising to make it easy to find a location and get reviews of local businesses, restaurants and more.
A new AOL Shopping and Commerce Search is resulting from a partnership with PriceGrabber.com to provide a comparison shopping search experience.
