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Is Yahoo a fit for Microsoft?
Sarah StottsberryConnie SkomraPhil Laube
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Overview
Should Microsoft buy Yahoo? Why?
What is the future of computing? What about Yahoo? – what do they bring? MS has what they need already to meet
the future
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Future of computing
Movement from “PC” to small devices – everything is a device
Less tapping – interface differently
Quantum leap – every aspect “Habitative computing”
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Future of computing
What’s at the base?Information
People can’t use information if they can’t find it
Search is what brings the information to the
consumer
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New World of searching
Devices searching without prompt (object level search)
Information will find the user Highly accurate / more relevant results
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Search & advertising:Matches businesses to end users
Cost: free
Cost: $$
Matching customers to businesses: Priceless
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Getting to the future
Search Services
Information consumer (End User)
Ad Services
Information Provider
(Business)
RELEVANCY
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Can Yahoo get MS to the future?
What does Yahoo bring?
Web search #1 in users
500 million users 88 million home page
visits(source: Yahoo! Corporate Overview August 2007)
Ad Services
Does it add to MS?
MSN But
Not #1 in search Brand loyalty?
MS has that too
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Yahoo search doesn’t add value
Page level search engine like MSNSearching text strings
Results (relevancy) is not any better
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Yahoo has a lot of users, but it’s not the search market Google gets most
searches now With existing search
technology Yahoo (and MSN)
now have the same, but too late
A better search can win them all
Worldwide Search Market Share
010203040506070
Mar-06
Apr-06
May-06
Jun-06
Jul-06
Aug-06
Sep-06
Oct-06
Nov-06
Dec-06
Jan-07
Feb-07
Mar-07
%
Google Yahoo MSN
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Panama Yahoo’s ad ranking engine
Determines what ads show up in an end user’s search
Spent a lot of time and development $$ Released 1Q 2007 Hasn’t been the home run that was anticipated
Revenue is not up substantially Did not exceed it’s target - Google
MSN’s AdCenter = Panama + demographic filtering
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Other ad services
Yahoo does offer other ad services that MS was lacking Statistical toolsConsultingPublishing wizardsAmong others
Purchase of aQuantive in May, 2007 filled this gap
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MS Business Model
Steve Ballmer, CEO Stated vision
“Help people reach their potential” Innovation – passion for technology
Reality – innovation in a way Take existing technology
Repackage it Enhance it Build it into a platform Make it all more accessible & relevant
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Summary“I skate to where the puck is going to be, not
where it has been.” -Wayne Gretzky
Yahoo offers current technology at an expensive price ($32 B market cap.)
MS has and can develop what is needed for the future without spending the money for Yahoo!