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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


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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