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.
In last weeks media week Microsofts’s UK head of marketing, Alex Marks, discussed microsofts marketing strategy and attempted to justify the money they had pumped into Facebook. Denying it was a simple land grab and a chance to hold of a Yahoo or Google purchase Mark’s validated the purchase by speaking about how Facebook satisfies a basic human need to communicate and engage with fellow human beings. He also goes on to say how internet behaviour is becomingly increasingly commnuity based seemingly suggesting that the future of the internet lay in propoerties such as Facebook. Apparently we are no longer talking about social networking sites but social utility sites much more than quirky communication tool and are becoming a tool for managin offline relathionships online. With the sum totoal of its wares so far the exclusivitiy of banner advertising on Facebook Microsoft has a long way to go before they convince anybody that they got a bargain for their £118M stake.
Tags: facebook, microsoft, aquisition
Filed under: acquisition, facebook, microsoft, msn, purchases, search engines, social media, social media promotion, social networking | Tags: facebook, live search, microsoft, social networking
Following Microsoft’s $240 million investment in Facebook for a small slice of their pie rumours are rife about this deal paving the way for the integration of live search functionality within the social networking site. The inflated valuation of the small stake is undoubtedly an attempt by Microsoft to keep Google at bay but could also be an indication that there is elements of the deal which incorporate an agreement to have live search integration. If this is the case then it could be a good investment for Microsoft as they have struggled to achieve any significant share in the search market place and the volumes available through their paid search platform have disappointed advertisers since its release.
The benefits to Facebook come from the simple fact that users would no longer need to leave the site to perform a search and so would spend more of their timeon the site, thus increasing appeal to advertisers. Oh, and theyve probably negotiated a revenue share on the money generated from Facebook based searches too. The only question that remains is will people using Facebook actually want to perform a web search? Well Myspace and Bebo both have the functionality, powered by Google and Yahoo respectively, so logic would suggest there is something in it. Whether thats worth $240 million, only time will tell.
How the search function may look:
The Purchases of google and Microsoft give a great indication of the way they see the market moving. This article tells of Microsoft’s recent purchase of TellMe, a provider of voice activated search technology. No prizes for guessing that this ties in with the markets interest in mobile search. Everyone appears to be fighting to be the best equipped for when the mobile market takes off. Apparently 2007 will be the year for the adoption of the technology and 2008 will be the year it takes off. I still remain to be convinced about the extent of mobiles emergance but one thing is for sure this wont be the last of the purchases in this market in 2007.
Microsoft Buys TellMe, Voice-Activated Mobile Search Provider
by Shankar Gupta, Thursday, Mar 15, 2007 6:00 AM ET
MICROSOFT FINALIZED A DEAL WEDNESDAY to purchase TellMe, a directory assistance provider and voice-activated mobile search firm, giving Redmond a possible edge in the race to develop a better mobile search tool.
Greg Sterling, principal of Sterling Marketing Intelligence, said that despite the manual dexterity mobile search users are developing, using a tiny keyboard still offers a sub-par user experience.
“There’s still usability problems that are pretty significant,” he said. “Keying in search queries is awkward. This is really about improving usability, and driving consumer adoption.”
Microsoft is reportedly purchasing the voice-recognition and directory assistance technology firm for between $800 million and $1 billion. A statement released by Microsoft specifically called out “search services on mobile phones that integrate with Live Search for mobile offerings” as an area of interest between the two companies.
Raises the question which has been posed many a time before, who is responsible for the copyright of material on search engines? personally I think it would be very difficult for the search engines to police this (cant believe Im on their side!) but agree that they do have a certain responsibility to apply the appropriate filters to reduce it. It is an arguement which I cant see begin resolved any time soon and unless someone comes in and forces them to stop, google will continue to make money out of copyright material.
Microsoft has accused Google of adopting a ‘cavalier’ approach to copyright over the search engine giant’s use of books, films, music and TV programmes without permission, and criticised it for making millions of dollars from other people’s intellectual property.
In a speech to the Association of American Publishers, which will be held in New York later today, Tom Rubin, associate general counsel at Microsoft, is set to accuse Google of exploiting copyright and intellectual property through its search engine business.
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Rubin will state: “Companies that create no content of their own, and make money solely on the backs of other people’s content, are raking in billions through advertising revenue and IPOs.
“Google takes the position that everything may be freely copied unless the copyright owner notifies Google and tells it to stop.”
Rubin will also defend Microsoft’s business practices by highlighting how it seeks copyright permission before using material created by a third party.
Google has come under fierce criticism in recent months from a host of media companies, including Viacom, which forced Google to remove over 100,000 of its video streams from YouTube.
Viacom join NBC Universal, which has accused Google of “only protecting copyright when it wants to”, and 20th Century Fox, which issued a subpoena to the search engine in January demanding it remove episodes of hit drama ’24′, starring Keifer Sutherland, from YouTube.
In the speech Rubin is set to accuse Google of, “bestowing upon itself the unilateral right to make entire copies of copyrighted books,” by publishing printed works online without permission.
Google has responded to the criticism by saying it only publishes extracts from books when it has the author’s permission. The company also said it generated $3.3bn in ad revenue last year, which it said proved it was not generating revenue from third party content.
Microsoft has recently sent letters to chief executives of large media companies, asking for support to stop internet piracy. The company now joins Walt Disney, News Corporation, Viacom and Time Warner in attacking Google’s use of third party content.
