Microsoft - Yahoo

Posted on February 3, 2008

Everyone states that putting 2 companies together who are not leading will not take over the leader Google.

This is true, but only for search. Yahoo is a great company with a huge community that reaches much further than search. In many ways Yahoo beats Google, just not in search.

Most advertising money is spent on search. Even if Microsoft-Yahoo doesn’t have the majority share of search, it doesn’t matter. Aggregating both portals into the same advertising service, will simplify advertiser’s management of their budget. It will also be a bigger market share, and so people will take more interest in advertising on Microsoft-Yahoo.

There exists a subset of users who advertise with Microsoft but not Yahoo. Likewise, there exists a subset of users who advertise with Yahoo, but not Microsoft. Putting Microsoft-Yahoo together will expand on both of these subsets of people, by broadening their advertising base.

It is a great move by Microsoft in my opinion. That is, just as long as they can properly integrate the parts of the company that should be integrated. For now, phase 1, this should only be the advertising portal.

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