Last week’s $45bn acquisition bid by Microsoft for Yahoo certainly gets you thinking.
I guess many of us saw it coming but, for me at least, not just yet. Now that I’ve stopped kicking myself for not buying shares in Yahoo, it’s time to start envisaging what the impact would be on search marketing, particularly in the UK.
First things first; if successful, the deal would be completed in the second half of the year – but I would anticipate a lengthy period of integration so there would be little impact on advertisers until 2009.
From that point on, the future is far from clear. This is not exactly a match made in heaven.
Both search engines are struggling to keep up with the Big G, particularly in the UK. Google has a near 80% of all UK searches and is going to take some knocking down.
Ultimately, the partnership needs to deliver significantly more users and searchers to increase revenue for Microsoft and that’s not going to happen just by joining forces. They need more then the sum of their parts.
It also certainly isn’t obvious what Microsoft would do with the Yahoo brand. The recent push to promote the Live brand may suggest that it won’t drop it, but surely it will.
Yahoo is stronger and to keep Live live, so to speak, as well as MSN, would seem just too many search brands in the pot.
As well as this branding hurdle there’s also the small matter of culture.
So far, the main talk has been about combined numbers and engineering resource but Microsoft shouldn’t underestimate the challenge of cultural fit.
A very different story – but cast your minds back to when Findwhat acquired Espotting.
The more entrepreneurial Espotting clashed big-time with the more old school Findwhat and this is seen as a key factor in the dwindling fortunes of MIVA.
The talk of enhanced innovation through mix of engineers makes sense, but for that to happen, the cultures of Yahoo and Microsoft need to gel and correspondence to date doesn’t bode well.
One interesting aside is that this move thrusts Ask into third place. Who knows, with Microsoft and Yahoo focusing on making their brands, offerings and cultures work together, we could begin to see Ask gaining ground.
Add that to the fact that we’re seeing some good innovation from Ask, and this could actually be a shrewder acquisition target for someone, maybe from outside the GYM big
Matt Brocklehurst is the head of marketing at Latitude