Why Microsoft wants Yahoo, an Analytical Perspective

When we saw the story about Microsoft wanting to acquire Yahoo, my colleagues got together to discuss why this would be an attractive fit for the two companies –much of it stems back to taking what Google has.

Microsoft has often wanted to be in the search business, they know the value of building relationships within they small and medium sized business. While search may look like the biggest cherry to pluck, Charlene gives reasons why it’s more than that. Hint, think about what google docs means to Vista and office apps.

But what about the recent Microsoft investment in Facebook, we clearly know that traditional internet advertising is a strength of the Redmond company, if MS+Yahoo will still be second place to Google, then we can expect brand advertising to be a safe bet.

I encourage you to check out those two posts, they’ve both been covering this space for a long time, and chime in and give your opinion on their reasoning. I thought Dave Taylor also did a great job of giving his analysis.

8 Replies to “Why Microsoft wants Yahoo, an Analytical Perspective”

  1. At the last web 2.0 summit Steve Ballmer told John Battelle in very clear terms that search is the “sweet spot” for advertisement, because it is the point of maximum engagement.

    That said, you are entirely right community matters alot (you had that graph about “freinds recommendations” a while back — well, just like I said back then: it’s not necessarily the recommendations of friends that are most highly valued, but rather the recommendations of know knowledgable experts/enthuiasts — and just like this comment, Eric Schmidt acknowledged on last night’s conference call that expertise matters more than friendship). So focused expert communities are the sweetest of sweet spots.

    Heheh… — I have known this all along!

    ;D nmw

  2. Buying someone for $46.4m is not to be taken lightly and the reasons not easily captured in a short article. There are likely to be hundreds of touchpoints and one that has ostensibly been left out in the press is the amount of reach Yahoo outside of the US. Sure, the technology play, the advertising play, and search; however, besides foreign reach, storefronts (not everyone likes yahoo), a moderately decent search engine placement product, what I think might be more interesting than the Google interplace is the interesting effect the purchase will have on players like IAC and social media products. There are a massive number of informal discussion groups on Yahoo Groups.

  3. While I understand Microsoft’s interest in competing with Google, is buying Yahoo the answer? I can’t tell you that last time someone said, ‘Go to Yahoo.’ I only hear ‘Just Google it.’ It appears that Microsoft is grasping at straws.

  4. Microsoft wants Yahoo for a host of reasons. One of which is Flickr.

    Microsoft Labs has a new amazing piece of software in development called “Photosynth”. If combined with Flickr, Photosynth will revolutionize the way we look at photos.

    There’s a lot more to it than Yahoo’s search functions.

  5. Buying someone for $46.4m is not to be taken lightly and the reasons not easily captured in a short article. There are likely to be hundreds of touchpoints and one that has ostensibly been left out in the press is the amount of reach Yahoo outside of the US. Sure, the technology play, the advertising play, and search; however, besides foreign reach, storefronts (not everyone likes yahoo), a moderately decent search engine placement product, what I think might be more interesting than the Google interplace is the interesting effect the purchase will have on players like IAC and social media products. There are a massive number of informal discussion groups on Yahoo Groups.

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