Saturday, February 2, 2008

Mr Ballmer! Two times zero still makes zero....!

These financial ‘analysts’ make me laugh some times. Microsoft’s intended purchase of Yahoo is supposed to ‘loosen Googles grip on ads’, ‘rock the foundation of online search’, to name just a few of the quotes I have seen. Truth of the matter is that both Yahoo and Microsoft have negligible market share in online ads, and for a very good reason: Their platforms are both very bad and have very little presence. No one uses the Yahoo or Microsoft search engine – only first time internet users that use IE's default and basically don’t know what they are doing. Not a great target market. The Adwords platform is light years ahead of Yahoo or Microsoft, has the *entire* market and is backed up by excellent support from a basically excellent company. Just how two losers uniting is supposed to beat Google is beyond me. Or am I missing something? Microsoft is $44 billion down and has just doubled its online market share to Zero. Mr Ballmer, you won’t beat Google on search and ads. Make Windows and Office better, and you might have a fighting chance to survive the Google onslaught and avoid that smart little Apple right behind you morphing into a Windows, Office and ultimately Microsoft killer.

5 comments:

Wayne said...

Not sure wether to agree. Don't forget that before the Google phenomenon, Yahoo was 'the' leader. Microsoft failed badly to compete with MSN and it's taking its chances with buying Yahoo in a bid to revive and 'enhance' it. As you said the Microsoft search engine sucks but we have to admit that the Yahoo one is much better. This somehow justifies at least part of the investment

Dare to gamble some Yahoo stock?

Nick Galea said...

Yahoo was indeed a leader but thats a long time ago. Even then, its search was eclipsed by Infoseek, Altavista and Hotbot. In my opinion its not about search technology but the fact that the Google Adsense / Adword platform is very good and has the entire market. Thats not going to change whatever Microsoft or Yahoo do. No, i'll skip on the yahoo stock although of course a 62% upside would have been nice :-)

Wayne said...

Closed yesterday (4th Feb) at $29.33, up from $18.87 of the 31st Jan. Not a bad earning for a 4 days worth of living ;-)

YHOO: NASDAQ

We're almost near your 62% upside :-)

Wayne said...

It's not looking like it's gonna happen...

http://money.cnn.com/2008/02/09/magazines/fortune/yahoo_rejects_bid_report.fortune/index.htm?postversion=2008020913

Nick Galea said...

I think thats great news for Microsoft. I think Yahoo has a very inflated idea of the value of their company and products. Now it will be interesting to see if those shares will go back down again. Because alone against Google Yahoo has absolutely no chance.