So Microsoft And Yahoo Walk Into A Bar . . .

Posted by: Jon Fine on February 1, 2008

Ah, Microsoft-Yahoo. It’s truly touching to me how companies are forever believing that if you mate two dogs, you can make a pony.

Quick thoughts:

1. FINALLY. AOL/Yahoo/Microsoft have been dancing around each other for years. (Don't forget that, back in 2005, Microsoft was convinced that it had beat out all rivals to score 5% of AOL. Oops!)

2. This is all about owning traffic. Thanks to its aQuantive deal, Microsoft now believes it has a better mousetrap to make money serving online ads. And, if I may do the annoying thing and essentially quote myself, if you're in the business of serving ads onto Web pages, you make a hell of a lot more money if you own the traffic than if you're just putting ads around someone else's content.

3. I am not an aQuantive doubter, but Microsoft's got a long and rocky history when it comes to playing in the content space. (To put this as gently as possible.) No one should be thinking this deal's gonna be a slam-dunk success.

Evidently investors don't.

Reader Comments

Steve

February 6, 2008 3:35 PM

I think you've got this one right. As a user (versus an investor), I enjoy using MyYahoo! From my perspective a MSFT combo is not only not additive, it's potentially subtractive. As an investor, I feel less horrible about having paid too much for my GOOG stock.

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The media world continues to shapeshift as new forms arise and old assumptions erode. On this blog, Bloomberg Businessweek will provide sharp analysis and timely reports on the transformation of this constantly changing terrain.

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