Forum Moderators: open
The same VC firms have ties to both. So does Stanford. Could it be a bit simpler than that, Yahoo took the pieces off the table so that Google's way to IPO was a bit less pressured, since MS now has to buy one or the other to become a giant in the space fast.
Or wait two years, while they develop their own technology. Yahoo was quoted as 85K advertisers before, and this is the first time in a few weeks I've seen the Overture figure quoted right at 88K advertisers.
Still, last November, Google announced they had at that time 100K. At this point, they should be ahead of that number.
MS with the amount of cash they have in the bank, can buy all the pieces on the table, if they really wanted to. Problem is, buying Google is like validating Linux in a big way, and even if they bought Yahoo, that would still give them a small piece (5-15%) of Google.
Hardly a controlling interest, but still. ;)
I'm still not convinced MSN can buy anyone significant without running into antitrust problems. Buying eith Google or Yahoo would land them straight in the target sights of the regulators.
What I thought was strange was the way they talked of cost savings. Sure Yahoo and Overture won't have to share the revenues now, but once MSN and other partners drop Overture the revenues will be a much smaller slice of the pie, and the 26*2002 earnings which Yahoo paid will turn into 50* 2005 earnings. That is ignoring the growth of the whole market of course - but still, there were cheaper options around.
The article also mentions Yahoo may use the OV database of customers to sell more Yahoo services. If Yahoo moved their directory to be more like Looksmart's, CPC rather than subscription, I'd be there in a heartbeat.
