Microsoft’s long pursuit of Yahoo ended this week with Yahoo opting instead for a search advertising deal with Google.
I’ve been watching this dance for a quite a while, and a few things have become clear to me:
- Google owns online advertising. Between its search/mobile text ad business and banner business with DoubleClick, the game’s pretty much over. Now, businesses can go to Google and get their ads placed on Yahoo as well. For telcos, that means getting into bed with Google as well on advertising.
- Yahoo will likely slide into irrelevance, in large part because execs are seemingly headed to the door after shares plummeted to $22 today (down from Microsoft’s likely $33-plus bid).
- Yahoo’s slide is unfortunate, because it has some market-leading registration-based services, including mail, Flickr, Delicious, etc. Some service providers still have portal deals in place with Yahoo; these should be re-evaluated.
- Microsoft may have struck out with Yahoo but I think they should turn their full attention to the carrier market. It just makes too much sense. They are already partnering with service providers on IPTV, MediaRoom, ConnectedServices, etc. And cutting sweetheart deals with wireless providers around WindowsMobile would be a good way to ensure that Google (with Android) and Apple (with iPhone, and a likely long-term Google partner) don’t sew up the mobile space as well.In fact, Microsoft (MediaRoom plus Xbox plus Zune (yes Zune) plus Windows Mobile) partnered with carrier Quad Play offerings would be a perfect package to go after mainstream consumers – let Google and Apple win the early adopters (and monetize them largely via advertising. MS+telcos can chase massive ARPU (and real subscription revenue) with their joint offerings.
I think a Microsoft – telco matchup (and subsequent service mashups) is an intriguing combo.
Telephony Online, Feb 2008
