Search Engine Land’s Danny Sullivan told eWEEK after the Microhoo call: “It effectively takes Yahoo out of the game, as far as I’m concerned. They’re no longer a wildcard to distract consumers or advertisers.”
Sullivan, who wrote a search eulogy for Yahoo, is among the majority. Take a look at these stories from the media and blogosphere:
How does a company like Yahoo win audience properties, bolster its display ad share and mobile search experience without a Yahoo core search offering?
This remains to be seen.
So, back to our challenge, to find someone who doesn’t believe Yahoo fell on the sword with this agreement? EWEEK managed to find two analysts who see the deal a bit differently than others.
IDC analysts Karsten Weide and Susan Feldman – who put out a research note on 19th July – like the fact that Yahoo will keep the majority of its search ad revenue, while saving millions of dollars on data centres, servers, storage and telecommunications costs.
They like that adding Bing’s search traffic market share would increase its market share to a combined share of 28 percent, making it a mildly more attractive offer to advertising clients. Finally, Weide and Feldman said the deal would allow Yahoo to focus on what it is good at: media and advertising.
“More focus on sales and a more attractive search ad offer could increase the combined revenue, thereby improving both companies’ top line and making them more competitive,” Weide and Feldman said.
But wait! In the conclusion of the research report, the analysts said this deal is strategically unwise for Yahoo.
Search will remain the most important online advertising segment for years to come. If that is so, why outsource search development to someone else without any control over that someone else’s work? Why, in one word, put one’s fate in somebody else’s hands? Because there is no way back from this deal: Once search is outsourced, it will be almost impossible to bring it back in-house. Should Microsoft lose the race against Google in terms of search relevance and ad placement technology, Yahoo’s ship would sink with Microsoft’s.
Okay, so maybe it really is impossible to find people who think this deal is good for Yahoo. Well, eWEEK’s phoning paid off.
Forrester Research’s Nate Elliot pointed out that search is one of the few places Yahoo hasn’t been successful. So, he argues, why not let Microsoft Bing take control? Elliot explained:
I don’t think this is Yahoo giving up on search. I think it’s them finding the easiest way to make money from search. They’ve been putting a lot of effort into this for a long time. They spent a lot of money, a lot of resources trying to challenge Google and it wasn’t working for them. If they can spend a lot fewer resources and still make money from search, that’s a win for them. For me, it’s a very smart move, to say: ‘We want to find a low impact, low resource way to monetize our search traffic and we want to spend our resources focusing on the things that we’re best at.
Elliot is in the minority, but you have to admire his logic and contrarian stance. What do you think? Has Yahoo begun its suicide march?
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