Sorry for the quick post on this huge subject which I first learned about in the online version of the WSJ in the article called Microsoft Unveils $44.6 Billion for Web Ad, Search Rival Yahoo. I have so much work to do today for Super Tuesday including motivating volunteers, but I'll give you my quick thoughts.
- Yahoo continues to have challenging times and they are laying off people. See this article from the Wall Street Journal. It looks to me like the changes that Jerry Yang put in place while they might be the right tactical fixes, Yahoo seems to be caught in a riptide and needs a completely new direction.
- The search industry is led by Google which holds a huge lead in search followed by Yahoo and then MSN. It reminds me of the telecom industry back in the 90s. The only way to compete with the top dog is for the smaller players to get together and compete. That's why I wrote a while back an article called MSN to Yahoo: An Overture in The Making? A rule of thumb for me in the search world is that Google is where all the action is, MSN conversion is off the charts but no volume, and Yahoo has lower conversions but volume is big. Combining them makes a lot of sense to me and still does.
- Yahoo's obvious push into the Ad Network with their RightMedia and Blue Lithium purchase makes MSN even larger and able to compete with Google's content network.
- Yahoo had (yes I wrote that and stay with me for a sec) great customer service and was able to weather the customer satisfaction storm when key management left like Wenda. However with these key management departures selling Yahoo might be a little easier now especially with a depressed stock price.
I don't see MSN letting go so easily and wondering what Google will do next. Any product changes or personnel changes that Yahoo had in the works will be derailed. Yes I know they will tell you that they will keep their eye on the ball, etc but remember I lived through AT&T acquisitions and consolidations and then the eventual buyout of Harrisdirect. People care about their jobs and their lives and they are not robots. Guaranteed that any product timelines that were undoubtedly pushed to their limits will slip because well people will care about their personal lives and may not be charged to deliver a product that won't be needed.
MSN pounces when they needed to to compete with Google. Yahoo to me looks finished, but perhaps a resurrected Overture could compete on the search side with Google.