A Deal Against The King - JRM
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“A deal against the KING”
From: Jay R Modi, MBA
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In the past….
• In spring 2008, Microsoft made a $47.5 billion hostile offer to buy Yahoo that went into vein.
• It led to lots of soul-searching at Yahoo and the replacement of its co-founder Jerry Yang with an outsider, Carol Bartz, in the chief executive role.
continued…
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In the past….
• In summer 2008, Microsoft denied its interest in acquiring Yahoo, but said that it would like to enter a deal for Yahoo's search advertisement business.
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…..and finally the deal got stuck against our own, yes its our on 29th July 2009
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…..the whole economy was still recovering from the clutches of recession but the world’s largest software giant got its wish accomplished.
continued…
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….. gets better opportunity to compete more effectively with Google in online search and advertising.
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….world’s second largest search engine will be directly benefited to use Microsoft’s searchtechnology on its website.
continued…
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…. also receives a big bump in annual revenues, 88% of the search-generated ad revenues from its own sites for the first 5 years of the 10-year deal, much higher than is standard in the industry.
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Can Yahoo-Microsoft jointly capture half of the market share?
Well its hard to predict this so early but its not that difficult…..
continued…
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Can Yahoo-Microsoft jointly capture half of the market share?
• is launched couple of months back and is getting positive reviews.
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My thoughts…
Personally I’m obsessed with using Google but when I searched with my name “Jay R Modi”, surprisingly I got the same number of hits that I get in Google.
So if not better, I can say that is as good as Google.
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Can Yahoo-Microsoft jointly capture half of the market share?
• Yahoo-Microsoft’s combined share is less than half of the Google’s total market share
65%
8%20%
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My thoughts…
For the next 5 years, there is no chance to surpass Google. Yes, I am quiet confident on this.Google has 2/3 of market share not just by fluke but its because of “Customer satisfaction and Customer loyalty”
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Can Yahoo-Microsoft jointly capture half of the market share?
• Under the 10-year deal, Yahoo.com and Bing.com will maintain their own branding but search results on Yahoo.com will say "powered by Bing." Yahoo, in turn, will be responsible for attracting premium advertisers.
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My thoughts…
I think that Microsoft got a bigger bite over burger.
• It has got market share from 8% to 12% with no upfront payment.
continued…
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My thoughts…
• Microsoft also has revenue share of ads served over Yahoo’s much larger volume.….and how can we forget the increased audience for Microsoft among internet users.
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Some quotes from the greats…
When the shares of Yahoo fell 12 percent, to $15.14, after the deal was announced.
“It certainly feels like Yahoo is giving away their strong and hard-fought share of the search market for really a modest price.”
» Darren Chervitz, the co-manager of the Jacob Internet Fund (owns about 100,000 shares of Yahoo)
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Some quotes from the greats…
After the deal announcement.
"I got an opportunity to swing for the fences in search."
» Steven A. Ballmer, Microsoft's chief executive
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Some quotes from the greats…
After the deal announcement.
"By combining the ... technology of both companies, we can create a real, viable alternative for advertisers.“
» Carol Bartz, Yahoo Chief Executive
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My Questions ???
• Is this deal going to get a green signal from antitrust hurdles like EU?
• How this deal will affect customers?• Can we expect any new product or feature
from Google as an answer to this?
Please leave your comments to answer this questions. I hope you enjoyed this presentation.
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References
www.businessweek.comwww.cnnmoney.comwww.blogs.nytimes.com