Who doesn't like bacon? In the short term or in small doses it tastes great and heck it is low in calories (high in fat). You eat it every day and in the long term it will kill you. That's what I think about the Microsoft Yahoo marketing partnership. In the short term it helps Yahoo but in the long term it kills their search business. The most significant part of this deal to me is that Bing will power Yahoo's search and that's going to kill Yahoo over the long term.
PRE GOOGLE OVERTURE RULED
Back in the early days of search, I cut an advertising deal for CSFBdirect with GoTo.com which would later be rebranded as Overture. This was before Google had a paid advertising platform. The folks at Overture were great and so was the platform powering our paid search results for delivering new account openings. Everyone was happy, everyone that is who wasn't getting screwed on the bid spread. Anyway then along came Yahoo who bought Overture.
YAHOO FAILS TO INVEST IN SEARCH - GOOGLE GROWTH
In 2003, Yahoo bought Overture and in the beginning things were fine. The search sales team remained the same and our results were pretty steady. Google came on the scene and then of course the paid search landscape changed. However Yahoo held its own for us (then Harrisdirect) but by the middle of 2004, Yahoo really started to tank and Google zoomed past them. This was a double whammy for Yahoo. They hadn't invested in the search platform and Google grew which actually ended up hurting them. Google never looked back and left Yahoo in their dust.
Basically Yahoo is repeating history. Clearly they were caught off guard by Bing with all of their management shakeups and as I wrote Yahoo was the short term target for Microsoft with Bing. In fact, Business Week's article on Bing a month back or so highlighted how much damage it would do to Yahoo. Now instead of being able to invest in their search platform or my likely because of their lack of investment in the search platform in recent history (Lu left Yahoo in August 2008), they can't compete with Bing let alone Google.
Therefore Yahoo pretty much dooms itself in the long term by ceding control of their search technology to Microsoft. Sure in the short term it is Yahoo's only option to even have a viable search program; plus, combined with Microsoft who gets a huge boost in search traffic, it actuallyt creates a reasonable competitor to Google. However, this market is driven by technology and the latest improvements to search, now Yahoo removes itself from the game probably forever.
P.S. Copy of Microsoft's Steve Ballmer email below. BTW - further backing up my post above, Steve wrote
We will get the resources and scale we need to compete effectively in search and to continue to drive new innovation for customers and advertisers, while Yahoo will increase their focus and investment on their online consumer experiences and other business priorities.
Even Microsoft isn't sure what Yahoo gets out of the deal
From: Steve Ballmer [mailto:Steve.Ballmer@microsoft.com]
Sent: Wednesday, July 29, 2009 7:30 AM
To: Microsoft - All Employees (QBDG)
Subject: Announcing a partnership with Yahoo! to expand search innovation and competition
As you’ve heard me say many times, search is a critical business for us. We took a major step forward two months ago, when we announced Bing. Already, Bing has generated huge buzz, great reviews, and early usage figures ahead of our expectations.
Today we’re taking another important step in redefining search and search advertising. Later this morning, I’ll be announcing a partnership with Yahoo in a conference call with Yahoo’s CEO Carol Bartz.
This deal is a win-win for Microsoft and Yahoo. We will get the resources and scale we need to compete effectively in search and to continue to drive new innovation for customers and advertisers, while Yahoo will increase their focus and investment on their online consumer experiences and other business priorities.
As part of the deal, Bing will become the search and search advertising platform for all Yahoo properties, and we will acquire the rights to Yahoo’s search engine and advertising platform technology. The combination of Bing and Yahoo’s scale and technology will accelerate the improvement of search – we’ll be able to add new features and improve the relevancy of search results more quickly than ever. And with expanded scale, we’ll be able to offer advertisers greater return on their investment.
There will be tremendous efficiency gains for both companies. Microsoft will assume responsibility for constantly improving search and search advertising technology on behalf of both companies. We see so much opportunity improve search on behalf of our customers – to make search more relevant and more useful to consumers, and more than just a list of blue links. Yahoo will assume responsibility for search advertising sales to certain premium customers on behalf of both companies. Given the huge opportunities in search and online advertising, we plan to redeploy most if not all affected employees into new high-priority functions.
Given the importance of the search marketplace, this proposed agreement will of course require careful review by regulators, which will take some time, but we believe it will strengthen competition and choice.
It’s been a long road to today’s announcement, but I’m extremely happy with where we ended up. This agreement will help bring choice and transparency back to consumers, advertisers and publishers. It will accelerate our efforts to restore competition to the search market currently dominated by one company. And it’s a huge validation of our strategy to redefine search, and all the great work the Bing and adCenter teams are doing. This deal will accelerate our efforts toward long-term success in search and search advertising.
You can learn more at a joint website we’ve established, which provides a summary of the deal and the advantages it will provide for consumers, advertisers and publishers.
I really can't stand Jon Corzine. I met him a few years ago in Nobu in NY when he was a Senator; I didn't like him then and I certainly don't like him today. In fact as a US Senator he did less damage because the Democrats in this state voted in another liberal Senator to take his place so their vote results didn't deviate. However, as this post pointed out, he has done a lot of damage to this state and deserves to get dumped. That's why these display ads that run via Google upset me.
Let's take a look at these frames starting with Frames 1 through 3.
The ad is utterly useless. It doesn't stand out and is almost as annoying as Lowermybills.com; those ad suck almost as much as Corzine sucks as Governor.
While writing that post below about President Obama's email supporting Jon Corzine.I found this great attack site called The Corzine Times. The site is well constructed and just like any good attack site has the latest anti-Corzine articles and news stories including economic statistics. The only thing that was missing was a link to Twitter.
Yes a link to Twitter. That's how I get a majority of my news these days. The site did have a link to a RSS feed which I thought - well how 2007. I can't remember the last time I added a new RSS feed and although not as long, I also can't remember when was the last time I looked at the feeds I'm receiving.
I think Twitter killed RSS feeds which is probably ok since hardly anyone knew what they were anyway and even less knew what it stood for.
On Friday I received an email from Barack Obama supporting Jon Corzine for Governor. Now while this email probably doesn't come as much as a surprise to you, I was a little disappointed (OK a lot) by the contents. In fact, this part of the email really was disappointing...
What bothers me so much President Obama is that you campaigned on Hope and Change. A new style of politics and an end to partisan fights. You inspired a lot of people (I was NOT one of them), but when you come to NJ to campaign for your friend the horrible Corzine, all you are doing is entering into partisan politics and providing more of the same politics that you campaigned against in 2008.
Your words can't spin the bad NJ climate. Your speeches and rallies can't fool the cynical NJ voter. Even the folks in Newark, Hudson County, Camden County, etc that supported your election know a do nothing, tax and spend liberal when they see one - especially after 4 years of lousy leadership.
You want to support your friend. Great. Go for it. Talk about needing a friend in NJ to help your liberal wealth distribution policies. Just please leave the spins and lies behind in DC. Corzine needs to go. Candidate Barack Obama wouldn't have lent his name to such an email devoid of Hope and Change.
Hope and Change in NJ starts with Dumping Corzine.
I saw a bunch of links over the weekend that was touting some small minute gain of Microsoft in the US Search market due to Bing. Most of these posts promote the $100 million in advertising Microsoft is spending and the rave reviews Bing receives for usability as a reason for Google to worry. I think these articles are just ways for people to take a shot at Google or folks that really want to cheer for an underdog. BTW - here's a good synopsis of the recent search postings courtesy of MediaPost.
I've worked with Microsoft for about 10 years. I also spent a while at AT&T so I know how big monopolist companies think. Sure would Microsoft like to knock down Google? Of course. Do I think that's their short term target? No. It is Yahoo. Here's why...
Yahoo is the search company in deep trouble because of Bing. Yahoo once lost their lead in search to an upstart named Google because of internal struggles and an unwillingness to invest in their search platform. I'm afraid it will happen again. Microsoft clearly has Yahoo in their sight and Bing was the plan B when buying Yahoo fell apart. Steve Ballmer will get his revenge on Yahoo.
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