MSFT Buying YHOO? Maybe

The rumors are flying… Again. If you follow the market, or the search space, you have heard this one before. I own shares in YHOO and because of that, I think that it is a great idea. On the business side? I am not inspired.

I don’t think that consolidation is needed in this space. At least not at this level. I am still a big fan of Yahoo Search Marketing (formerly Overture).

For people doing SEM and PPC (one in the same in most views) MSN coming along was something that was cheered by most. Finally another player who is significant enough to gain distribution and allow us another market to compete in. Well, it didn’t exactly turn out that way. When MSN Adcenter was finally live, I was very excited. With the reach of MSN through the various properties, I felt certain that they could challenge Yahoo for the number 2 spot in the PPC world. Not the case. In fact, it has been rather disappointing. You can achieve some nice results with Adcenter advertising, but the scale just isn’t there.

Well, what does Microsoft do? What does Yahoo do? Does a marriage make sense?

For shareholders in Yahoo (YHOO) this does make sense. For users… we shall see. I picture a post acquisition Yahoo with many of their parts being shut down.

What I think of most when I think of this possible combination is “what a free email behemoth this is”.

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