Markets against Google
The advantages for Microsoft are greater scale in ad sales, media, and email markets, the ability to compete in instant
messaging more directly against AOL and the ability to compete more directly in innovation markets against Google. Experts speculate that a successful deal could lead to AOL being lapped up by none other than Google; creating a virtual duopoly in the online advertising space. But with Yahoo! being a struggling conglomerate, dabbling in media, sports, internet technologies and just about everything else, it’s a bit of a mess. “There certainly will be high integration costs”, opines Marc. Of course, for Microsoft, that hardly seems to be a constraint. As per Richard, “Microsoft would become a powerhouse player in online advertising and a much stronger competitor to Google.”
Yahoo! relies on a robust first quarter to improve its bargaining position, as the Board of Directors responded back to Balmer, “we recently reaffirmed our Q1 and full year guidance, which is a testament to our ability to perform in line with our expectations despite the current economic environment.“ But will the results be good for the company? Though Google just reported a 30% jump in quarterly earnings, it is not clear whether that signals a turn in the industry or just taking more share from Yahoo!,” says Marc. Yahoo! has been trying since early February to get other bidders to exceed Microsoft’s bid, but nobody has done so yet. One more bad quarter from Yahoo! and Microsoft might lower its bid price, and even perhaps pull out – that’s quite evident!
The fact that stands tall is that Microsoft is not buying Yahoo! to be Yahoo!. This would lead to gross reorganisation of Yahoo!, probably all under the Microsoft brand name. Plus, if ultimately antitrust regulators block the deal, it would be very hard for Yahoo! to regain the needed brand equity to again be able to compete independently. Given the lackluster performance of Yahoo!’s business & stock price, there actually exists no reason for shareholders to be against a sale to Microsoft, feel other analysts.
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Source : IIPM Editorial, 2008
messaging more directly against AOL and the ability to compete more directly in innovation markets against Google. Experts speculate that a successful deal could lead to AOL being lapped up by none other than Google; creating a virtual duopoly in the online advertising space. But with Yahoo! being a struggling conglomerate, dabbling in media, sports, internet technologies and just about everything else, it’s a bit of a mess. “There certainly will be high integration costs”, opines Marc. Of course, for Microsoft, that hardly seems to be a constraint. As per Richard, “Microsoft would become a powerhouse player in online advertising and a much stronger competitor to Google.”Yahoo! relies on a robust first quarter to improve its bargaining position, as the Board of Directors responded back to Balmer, “we recently reaffirmed our Q1 and full year guidance, which is a testament to our ability to perform in line with our expectations despite the current economic environment.“ But will the results be good for the company? Though Google just reported a 30% jump in quarterly earnings, it is not clear whether that signals a turn in the industry or just taking more share from Yahoo!,” says Marc. Yahoo! has been trying since early February to get other bidders to exceed Microsoft’s bid, but nobody has done so yet. One more bad quarter from Yahoo! and Microsoft might lower its bid price, and even perhaps pull out – that’s quite evident!
The fact that stands tall is that Microsoft is not buying Yahoo! to be Yahoo!. This would lead to gross reorganisation of Yahoo!, probably all under the Microsoft brand name. Plus, if ultimately antitrust regulators block the deal, it would be very hard for Yahoo! to regain the needed brand equity to again be able to compete independently. Given the lackluster performance of Yahoo!’s business & stock price, there actually exists no reason for shareholders to be against a sale to Microsoft, feel other analysts.
For Complete IIPM Article, Click on IIPM Article
Source : IIPM Editorial, 2008
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