Microsoft still wants Yahoo.
Last summer I worked in banking on the west coast, and the group I worked at was the buy-side advisor for Microsoft in the proposed Search deal to buy Yahoo, a highly coveted deal that would have wielded tens of million dollars in fees for our group. When I arrived, the deal had just officially died, and you could sense the immense fear and disappointment around this deal not happening—people knew that this deal would have saved a couple heads in the office. Btw, Yahoo paid $79M in fees to its advisors, despite no deal, which I find absolutely ludicrous.
Fast forward to the worst economy in 60 years to March 2009, and Microsoft still really wants a piece of Yahoo. It’s no surprise, since 14 years into its online business, MSFT has miserably failed to do anything in search. And we heard recently that Yahoo’s search share has stabilized, i.e. it’s not losing any more share. See Surprise! Yahoo Now Has Edge In Microsoft Search Negotiations, showing that Yahoo’s search share has stabilized at 20%.
And Steve Ballmer has finally admitted that Microsoft sucks at search.
Meanwhile, Yahoo, continues to unveil new PPC Video Ad Tools, and has been "quietly testing" the sponsored search tool Rich Ads In Search with a select number of national brand advertisers, according to Tim Mayer, Yahoo VP for search monetization and distribution. It took nearly a year to create and test the Rich Ads In Search, but Yahoo has finally unveiled the program.
The advertisers--including Pedigree, Pepsi and Esurance--have seen click-through rates increase by as much as 25%. The pay-per-click (PPC) service for video ads appears to increase brand exposure and influence higher conversion rates. "People can now add interactive elements to sponsored search such as a video, search box, or deep links," according to Yahoo.
Brand advertisers have been testing the 30- and 60-second video tool. The ads link to relevant pages on the brand's Web site, a strategy that can help drive conversions directly from the Yahoo search query pages. And a box within the listing allows users to search for products or a store location without navigating away from the search query.
So.. back to Yahoo and MSFT - I think it's very likely Carol Bartz will strike a search deal (not slell all of Yahoo), and the only ones happier than Steve Ballmer and company will be the bankers.
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