The impact of Microsoft’s proposed $44.6 billion deal to buy Yahoo holds huge repercussions for the search and online advertising community.
“We believe our combination will deliver superior value to our respective shareholders and better choice and innovation to our customers and industry partners,” said Steve Ballmer, CEO of Microsoft, in a statement.
No one from Microsoft or Yahoo returned calls by press time.
Last year, both of the firms acquired ad networks — Microsoft bought AdECN and Yahoo bought Right Media — to improve ad serving capability. Microsoft also acquired digital marketer aQuantive. On the search front, both companies have long been unable to unseat Google, which according to Hitwise accounted for 66% of all US searches in January. Combined searches on Yahoo Search and MSN Search came to 28%.
“The ramifications of this kind of deal would be huge,” said Michael Gartenber, VP and research director at Jupiter Research. “The challenge is bringing the cultures together and integrating the technologies.”
Yahoo posted a 23.4% year-over-year revenue loss for Q4 2007. CEO Jerry Yang pledged to cut the company’s 14,500 employees by nearly 7%.
