Microsoft Bids for Yahoo what are the Implications

Microsoft has pounced on slumping Internet icon Yahoo with an unsolicited takeover offer of $44.6 billion in its boldest bid yet to chall...

Microsoft has pounced on slumping Internet icon Yahoo with an unsolicited takeover offer of $44.6 billion in its boldest bid yet to challenge Google's dominance of the lucrative online search and advertising markets.
Microsoft said it sees at least $1 billion cost savings generated by the merger, and intends to offer significant retention packages to Yahoo engineers, key leaders and employees.

Reason for the Bid

Despite an aggressive push in recent years, Microsoft's online advertising expansion hasn't paid off. Last week, the Redmond, Wash.-based company reported a 79 percent jump in its overall profit, but its online division's loss widened to $245 million.
And Yahoo has been struggling to attract more advertising even though its Web site attracts one of the biggest audiences. The Sunnyvale-based company's profit has declined for five consecutive quarters, prompting plans to cut 1,000 jobs later this month, a 7 percent reduction of its 14,300-employee work force.

Microsoft's Future Strategy

If Microsoft goes about this smartly, they will take the best of Yahoo and apply it to their own properties. Live.com will become Yahoo Search. Every Microsoft search box on every computer running IE will become a Yahoo Search Box. Yahoo is much closer to search than Microsoft will ever be and its worth the investment .
Yahoo Search Marketing and adCenter will indeed merge into something that will become a solid competitor to Google AdWords, and Yahoo Publishing Network does have some strong partners in place to work with adCenter to develop a more desirable offering.

Microsoft's Control over Web2.0

Search Engine Journal has an interesting comment on this deal
How ironic? Microsoft may very well soon be the parent company of the flagships of Web 2.0; Delicious & flickr. Wasn’t Web 2.0 kind of an anti-Microsoft movement in the beginning?
Microsoft owns part of Facebook, runs advertising on Digg and may soon own Delicious & Flickr. Web 2.0 is over.

via ( Businessweek,Yahoo,Techcrunch, Search Engine journal)
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