Microsoft bid for Yahoo at $31 a share in a bid to gain some market share in the rapidly evolving online ad industry.
An earlier post on this blog here, expressed the possibility of consolidation with Microsoft buying Yahoo. Microsoft senior leadership was astute and kept this possibility on bay for a while. They made their move with an unsolicited bid when the Yahoo stock was beaten down due to lacklustre performance by Yang and the Gang. Larry Ellison moves in similar ways.
The media expressed that there may be anti-trust problems. Now, you gotta be kidding me! Together Microsoft and Yahoo will cover only a quarter of the total space that Google commands. I learnt at least this much in my Business Law class from Prof Hersch. I am not sure why the popular media made these comments. This just indicates how the media runs hurriedly to create sensational headlines rather than providing any thought to it. None other than CNBC said this and other channels followed suit ! This sad display of journalism reminds me of Prof Chris Telmer, who used to rip apart the pink press (financial press) for spreading false notions in the minds of the naive readers. Astute and educated investors read most of the pink media with a grain of salt due to such incidents.
Of course, Yahoo and Microsoft have huge share of email accounts. However, I am not yet sure if they have good enough products to target ads in that fashion. If they build it together, they will save money on building that. May be both already have products in the pipeline...who knows.
Going ahead, we will witness some interesting times in the search space.
1. MSN Money must leverage Yahoo Finance for their content but not the UI. The international market and eye balls (remember - Jewels at the bottom of the pyramid!) that MSN Money will get with the inclusion of Yahoo Finance content on MSN Money will surpass that of Google Finance easily.
Google Finance does not have any grip in the foreign markets - for instance, the Indian market. Whereas Yahoo Finance has a good set of data (though there is room for improvement for the international markets. Besides they roll no the RIC codes and hence, have a standardized convention for naming the stocks.
2. We will have a very colorful time watching the titans clash for the online ads market. MSFT has been ramping up its Live Search staff with good talent from around the globe. They have some way to go in order to make themselves equivalent to that of GOOG. However, they are on the right path.
3. Will MSFT be able to retain the top talent from YHOO? or will they be bought away by GOOG or facebook? Time will tell. Most of the sources I talk in Yahoo with tell me that they will not like to work for MSFT given that when they chose their careers - they had a choice and they actively chose YHOO over MSFT.
Another take on it is that this was a la The Art of War move by MSFT in which MSFT doesn't engage YHOO into a battle but just surrounds it. YHOO has nowhere to go. Mr. Yang and Gang could not maintain a high valuation for the ailing online giant. GOOG cannot make a bid as they dont want another regulator hassle from the DOJ for another anti-trust trial (this time it will be fatal).
In conclusion, 31 bucks a share is not a bad price to pay considering the additional steady revenues it will bring in. Microsoft senior leadership was astute and kept this possibility on bay for a while. Let us see how YHOO responds to this bid.
Showing posts with label trendwhizo. Show all posts
Showing posts with label trendwhizo. Show all posts
Friday, February 01, 2008
Wednesday, March 07, 2007
neo biz harp
It is fairly apparent that my exams are over. :P
The Verizon article in WSJ today morning made me log this post. Verizon wants to get into gaming and other stuff in order to capture value of the market they are creating. Stupid ! - they didn't play it safe like AT&T. Their top managers shouted from the top of their lungs that ATT will find it difficult to expand capacities later on. Expand for who? AT&T spent only 4.3 b whereas Verizon spent 20b. A huge committment doesn't always result in a huge return. Verizon has several plans but the original visionaries of the FiOS deal are still around - ask them and they seem to be scared. Scared that their plans may not pan out what they originally planned it for.
For instance, in the gaming space, there is already this company in place: Digital Chocolate. Name of the company aptly suits it as it is going to indulge public in mass-consumption of the cellphone gaming.
Podshow is another firm which will take major piece of the content provision pie in this convergence game. It will be mostly the non Verizon firms which will come in and derive value from the high bandwidth networks made available. How can Verizon stop them from free-riding? Differential QoS is already in doubts due to the whole net-neutrality saga.
There is no point for Verizon to spend so much on the backbone in order to create such large networks which will eventually be used by others. One conspiracy theorist mentions to me that the person who politically forwarded this decision for laying out the fiber had personal interests in the entire affair. Neither the shareholders nor the BoD were convinced about this. So, what does a shareholder do? Sell !
btw, other neo-biz which excited me recently were: Tell Me, Akimbo, Good Technology
Tell Me: has created this seemingly huge platform already. Slowly, steadily, they plan to takeover. Before we even knew, they have 35 m folks working on their systems daily ! They arent the state of the art but they have been able to capture the market relatively fast. Personally, I love the Tmobile IVS - its awesome !!! However, in this world where network externalities come into play - Tell Me may start to rule !
Akimbo: Your wish is on demand ! This continues in my line of harp - IPTV and the digital convergence. Akimbo is well-positioned to take advantage ...they might be little too late to create a lock-in with set top boxes similar to those of 2Wire's or Scientific Atlanta's. However, they are making sure that they have the content !
Good Technology: got acquired by Motorola - dayyuuummm ! Motorola's fatherhood may either provide a huge impetus or suffocate this new startup's spirit. Let us see what happens. Good Technology take advantage of the fact that there are more cell phones than personal computers !
Now, I need to get going to prepare for an engagement tomorrow !
The Verizon article in WSJ today morning made me log this post. Verizon wants to get into gaming and other stuff in order to capture value of the market they are creating. Stupid ! - they didn't play it safe like AT&T. Their top managers shouted from the top of their lungs that ATT will find it difficult to expand capacities later on. Expand for who? AT&T spent only 4.3 b whereas Verizon spent 20b. A huge committment doesn't always result in a huge return. Verizon has several plans but the original visionaries of the FiOS deal are still around - ask them and they seem to be scared. Scared that their plans may not pan out what they originally planned it for.
For instance, in the gaming space, there is already this company in place: Digital Chocolate. Name of the company aptly suits it as it is going to indulge public in mass-consumption of the cellphone gaming.
Podshow is another firm which will take major piece of the content provision pie in this convergence game. It will be mostly the non Verizon firms which will come in and derive value from the high bandwidth networks made available. How can Verizon stop them from free-riding? Differential QoS is already in doubts due to the whole net-neutrality saga.
There is no point for Verizon to spend so much on the backbone in order to create such large networks which will eventually be used by others. One conspiracy theorist mentions to me that the person who politically forwarded this decision for laying out the fiber had personal interests in the entire affair. Neither the shareholders nor the BoD were convinced about this. So, what does a shareholder do? Sell !
btw, other neo-biz which excited me recently were: Tell Me, Akimbo, Good Technology
Tell Me: has created this seemingly huge platform already. Slowly, steadily, they plan to takeover. Before we even knew, they have 35 m folks working on their systems daily ! They arent the state of the art but they have been able to capture the market relatively fast. Personally, I love the Tmobile IVS - its awesome !!! However, in this world where network externalities come into play - Tell Me may start to rule !
Akimbo: Your wish is on demand ! This continues in my line of harp - IPTV and the digital convergence. Akimbo is well-positioned to take advantage ...they might be little too late to create a lock-in with set top boxes similar to those of 2Wire's or Scientific Atlanta's. However, they are making sure that they have the content !
Good Technology: got acquired by Motorola - dayyuuummm ! Motorola's fatherhood may either provide a huge impetus or suffocate this new startup's spirit. Let us see what happens. Good Technology take advantage of the fact that there are more cell phones than personal computers !
Now, I need to get going to prepare for an engagement tomorrow !
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