When Yahoo! is said and done

February 14th, 2008

I’ve stayed off the subject for long enough. There have been a few times when I wanted to add my two penneth into the Yahoo! debate, and then thought better of it as there was always going to be so much more to come. But today is the day - you lucky, lucky people.

It’s been a busy week in the world of Yahoo!, and there’s bound to be more following the recent board meeting. Here’s a quick recap assuming everyone knows the Microsoft bid was rejected last week. Jerry Yang, co-founder and chief executive, has spoken of his feeling that Microsoft’s bid ’substantially’ undervalues the company. The News Corp share option, which has gained a load of coverage today but has been discussed for a few days, is looking more attractive if Yahoo! want to save face, or at least bump up the price. And all this after the Yahoo! workforce was trimmed by a 1000, undoubtedly in preparation for a sale. Oh and the purchase of Maven also went through to strengthen Yahoo!’s online advertising offering, focused specifically on video. And breathe…

So where does that leave the current state of play? Well on the sidelines we have Google and AOL, but they appear to be remaining quiet so for the moment it’s a straight shootout between Microsoft and News Corp. Who will the winner be? Well the one that wants it most. Sounds obvious, but Microsoft need Yahoo! in my opinion. It is already too far behind Google in delivering the web for consumers, so missing out on this purchase may be a step too far.

It also very much depends on whether Yahoo! want out or not, in which case News Corp is more attractive, but to be honest I don’t think this will ultimately be Yahoo!’s choice.

So when it’s all said and done, what will Yahoo! be? Unfortunately I think it will be a fond memory for some and part of a wider offering for the next generation.

Full details on the BBC, TechCrunch and NY Times

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Facebook gets Micro-investment

October 25th, 2007

Microsoft has paid $240m (£117m) for a 1.6% stake in Facebook. This may seem like a mighty price for such a small stake, but it is important for two reasons.

1. Microsoft has beaten Google to the punch, securing a stake in the fastest growing social network in the world, as confirmed by ComScore’s figures below:

2. Microsoft, which already provides banner advertising on Facebook US, has now secured long term international advertising access to one of the largest (50 million active users) social networks, becoming the exclusive third-party advertising platform partner for Facebook.

It is important to remember that as social networks become increasingly popular, many people are using their accounts as their door way to the web. Microsoft recognises that if its advertisers have access to these user’s through their web gateway - then the opportunities to sell are enormous. Furthermore, thanks to the user information provided through Facebook profiles, advertising can be targeted more precisely than most other online advertising channels.

Google knows this better than most and its charge to monopolise the online ad sector has taken a significant hit with this announcement. Although I don’t think they will be unduly concerned due to their considerable headstart in the sector.

This deal also answers one of the hottest valuation questions on the web today. How much is Facebook worth? The answer: $15 billion or £7.3bn…currently. This is why Facebook turned down Yahoo!’s $1 billion bid last year.

Not bad for a social networking site that started in a university dorm room less than four years ago, and hasn’t broken even yet.

The BBC has the full story.

Technorati tags: microsoft, facebook, google, online+advertising

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