Why Microsoft Wants Yahoo

Writing by Pay Per Click Journal on Friday, February 15, 2008 Leave a comment

This is the best article I’ve seen on Microsoft’s desire to own Yahoo yet. The reason I think it’s significant, and relevant, is because it addresses the need to acquire additional search traffic in two key areas: Local and Mobile.

In case you aren’t paying attention, local and mobile search are two of the fastest growing areas of search right now. Online advertising depends a great deal on the growth of these two key areas. In fact, if it weren’t for search then online advertising would not even be an industry. Advertisers are there to capture the search market. After all, that’s where the people are.

The author points out, correctly, that search and advertising go hand in hand. To dominate one, you must dominate the other. The reason Google is the leading advertising provider online right now is because Google owns the search market. Microsoft knows this. That’s why an acquisition of a large property like Yahoo is so important to them.

The fact is, and I think most people watching the search industry right now know this, if Microsoft does not acquire Yahoo then any chance that it ever had to compete with Google in the area of search or advertising will be gone. But I like the article for another reason as well. The author compares the local and mobile search products of Google, Yahoo, and Microsoft in order to show how they fare right now. It’s the two areas of search that have no real dominant player – there is still a competitive playing field. And it’s growing, which means that future success in online search and advertising will depend a lot on these two key growing areas. Maybe Microsoft is thinking about that and maybe that’s why Yahoo is so attractive to them. And maybe Yahoo knows it and that’s why they are playing coy. The question now is, now what?

Leave a comment                      Category: Yahoo! Search Marketing                      

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