Today it’s about Microsoft bid on Yahoo….
Some of you may say: “NO no.. not again, it has been all over the news, paper, tv for the past couple of months…I know this and i know that…”
Well, i certainly don’t want to bore you with what has been discussed about, written about regarding Microsoft and Yahoo. However, what i plan to do is to share with you what my thoughts are regarding Microsoft’s bid in North Southeast Asia context, coming from a Search Engine Specialist perspective.
I know that i may upset many of my friends who are working at Yahoo, Microsoft or even Google with what i am going say. But well, these’re my honest thoughts about the situation at the moment.
Ok let’s dive in…shall we?
1. Back ground (just so that if anyone who doesn’t follow the news at all still has a good picture):
On Feb 01, 2008, Microsoft announced that it made a bid for Yahoo! inc at approximately $44.6 billion in cash and stock.
Yahoo Board responded by saying that the proposal undervalued the company and it tried to seek other options.
After much talks with various parties, including the offer to help from Google, no better deal could be found.
After about 2.5 months Microsoft said that it would agree to raise the bid by roughly 5 billion. However Yahoo! still said No.
On May 3, 2008 Microsoft announced its withdrawal from the deal, saying that “After careful consideration, we believe the economics demanded by Yahoo! do not make sense for us, and it is in the best interests of Microsoft stockholders, employees and other stakeholders to withdraw our proposal“
2. My thoughts/comments:
Online Advertising combat
As many people mentioned, i have little doubt that the main reason why Microsoft wanted to buy Yahoo was not because they want to catch up with Google in the highly lucrative Online business, particularly Search Engine Marketing and Display.
My comments on this post will mainly from a Search Engine Marketing and Display perspective as well.
Google conquered the Search Engine world with market share in some countries as high as 90%.
It’s been moving aggressively to Display Media (including banners, video etc…) with acquisition of YouTube, DoubleClick etc…
While Google profit increases month in month out, Yahoo and especially Microsoft see a decrease not only in their market share but more importantly their bottom line.
The trend is clear, Yahoo lost in almost every single mature market to Google except for Japan, Korea, Taiwan, Hong Kong.
Microsoft MSN or Live Search is no longer in the picture when advertisers/agencies plan their Search Engine Marketing campaigns.
MSN Live Search & Ad center
It looks like MSN Ad center offers very sophisticated tools and technology recently with regards to Search Engine Marketing (paid search). However, the fundamental things for them is end users don’t use Live Search.
So no matter how good their technology is, advertisers simply can’t use it because the reach is just too small, or rather negligible.
Live Messenger is losing ground
Regarding Display Media, they are falling behind as well. So far in this region (Southeast Asia), Windows Live Messenger is the only place left which attracts advertisers for Display campaign.
However, it looks like advertisers start to look for alternatives to Live Messenger or other big portals by using Ad Network or buying real estate on Facebook, Friendster etc… since Live Messenger audience is more or less the same with Facebook’s or Friendster or any other social sites. (please correct me if i am wrong in this aspect)
Yahoo Search Marketing issue
Well one good thing for Yahoo in this region (North and Southeast Asia) is that there are still people using Yahoo to search. In fact, there are more people using Yahoo Search in Hong Kong, Taiwan, Korea and Japan compared to Google.
In Singapore, Yahoo still has about 30% of the search market share.
However, there are a lot of issues with Yahoo Search Marketing or Panama:
- Yahoo doesn’t have a single platform like Google for advertiser to promote their site across multiple countries. What it means is you will need to sign up for an account in each country you want to target.
For example, right now i have accounts with Yahoo JP, KR, HK, TW and Southeast Asia for a single client. Every time i will need to do 5 times more paper work compared to Google, I need to cater for different time zones, contact different sales team, operation team in each individual country…. It’s just a total waste of time.
Thank god, there is a single platform for Southeast Asia, not 6 individual countries (SG, MY, TH, ID, PH and VN). However, there are no local languages available yet for Southeast Asia, which is a detrimental issue since English is only popular in Singapore and Malaysia. The rest of the countries use their local languages.
- Panama itself is still very far behind compared to Google in terms of the robustness of the system. The approval process is long and tedious. Quality score Or Quality index is not transparent.
- Keyword suggestion tool simply can’t make it.
- The UI simply can’t make it either. You need to do more steps to get things done compared to Google.
- There is no offline desktop base software like Google Adwords Editor to manage the campaigns so you can guess how tedious it is to manage a big campaign totally online
- Uploading function is not always available so making bulk changes to the account is a really big challenge. I am not sure how much time i wasted just to change a single destination URL. I have to go through every single ads being affected and change one by one.(Edited: Yahoo does have the Bulk Edit function. It’s available for every account. I am sorry for this. )
- You would think that IP targeting is a Must. However, there is no IP targeting for Yahoo Hong Kong, they just target people who visits www.yahoo.com.hk Oh my God
- There is no My Client Center or MCC account so it’s super troublesome especially for agencies who often have many clients. I need to create an excel file just to keep all the usernames and passwords alone…
- The way Panama handles single byte characters and double byte characters is just surprisingly funny. For example, in Hong Kong, Yahoo assumes that everyone uses Chinese which is double byte, hence the character limit for ad copy is cut by half. Not only that, even if you use single byte characters (alphabetical characters), each character is still considered double byte and take up the same amount of space. Oh my god!
- There is no API access to Yahoo Panama Southeast Asia yet so good luck with your Omniture, DoubleClick or any bid management tools for that matter…
- Well i think i should stop here so that i don’t upset my friends at Yahoo too much….
Yahoo Display Media
- Well at least the Yahoo portal still has certain values. Advertisers still book display banners on the homepage or Yahoo Finance, Travel etc…
- Yahoo is still a very valuable brand Online.
- Yahoo Messenger is quite popular in some countries for example Vietnam so there are a lot of advertisers there.
- CPM for some banner campaign can be very high using Yahoo properties and the entry level spend is not low either.
- At least Yahoo allows third party ad serving technology so it’s not totally bad
Other issues with Yahoo
I can’t say too much about issues like Human resources or decision making procedure in too detailed. However, one thing i can say is that Yahoo has major problems in these aspects.
They are trying very hard to streamline everything but it’s a very big task i think.
Let say for example, if they want to consolidate Search Marketing into one platform, how can Yahoo resolves the issue of individual team in each country is managing its own property at the moment?
Not only that, Yahoo team in each country may invest in other portals, other businesses which make the whole thing even more complicated. The portal itself may or may not 100% owned by Yahoo US, i am not sure…
Enough being said about the problems with Microsoft and Yahoo alone, from my personal opinion:
- Microsoft has a very daunting task ahead if they decide to buy Yahoo
- North Southeast Asia is a very diverse region with almost every country ‘s using its own local language, has different business practices…
- The dynamics of Yahoo team in each country is considerably different.
- Being able to streamline the whole back end process is still a big question mark. Yet if they can’t do that, advertisers will have additional excuse to use Google.
Microhooo VS Google
I love Google products (not only the search service, but even their Adwords platform). There is no doubt about it. I have a few friends who are Googlers.
I’ve worked with Google from a agency perspective for sometime and they are quite professional.
However, i have to say again that Google has grown into a fearful size. It completely dominates the Paid Search game and is moving very aggressively to put itself at the center of all Online needs.
Right now you can either follow the Google’s rule or out of the game and it frightens me.
I would love to see more competition in the market because i think it’s more healthy for the industry that way.
At the end of the day, despite the “Do no Evil” moto i still think that Google is a publicly traded company hence it needs to satisfy the share holders, who pay considerable amount of money to buy Google stock. It costs USD $588/share today 14 May 08.
The only way for Microsoft or Yahoo to start gaining in the Online Marketing game is to start to deliver what advertisers are asking for. We love to have options when we plan our Online campaigns, love to spend more money with Yahoo or Microsoft. However, it needs to work in terms of delivery and processes.
One final comment, if you don’t know yet about the recent change in Google Trademark policy in UK and Ireland, look out for it. As of May 2008, competitors are allowed to bid on each other brand terms etc… which was not the case previously except for the US.
There can be many reasons for this change but i think one of them is definitely to help making more money for Google. UK is the biggest non-US market for Google in terms of Paid Search revenue. But well, what can advertisers say about it, especially the big brands? Google sets the rule of the game now…
I will end my article now and as per usual, feel free to drop any comments you may have or shot me an email. My email is firstname.lastname@example.org
Thanks for your time,