So after Yahoo stocks hit an almost all time low, Microsoft did what they do best: snap the competition up. And what a catch they had this time! Yahoo, founded in the very early 90s (saw its first million page views in 1994) by two Stanford grads, is now one of the top contenders in the “new media advertising industry” heavyweight championship, industry which is estimated to be worth Â£1.3 Billion ($2.5 Billion USD) at present in the UK alone with an additional Â£8 billion ($17 billion) in the US in the end of 2006.
So what is Microsoft really buying into?
Yahoo has survived and strived by being able to keep up with the Joneses (aka Google) even if they didn’t really innovate. Microsoft on the other hand right now is simply an “also-ran” on Web 2.0. What Yahoo enjoyed simplyfing (web mail, directory index, online games) Microsoft enjoyed ‘businessfying’ (remember HoTMaiL before Microsoft?). And with their platform-agnostic approach it’s no surprise Mac users have much higher affinity to Yahoo products and services than anyone else’s. Yahoo is the Apple of web 2.0, lifestyle included. Just look at their acquisitions: Photo-sharing with Flickr, del.icio.us social bookmarking, blogging site MyBlogLog, BuzzTracker, Rivals.com, Upcoming.org, video editing JumpCut, Blo.gs, Bix.com.
But Yahoo isn’t just a lifestyle brand. It was also gearing up to online advertising in a big way, and has been doing so for a while with even more acquisitions that started with Overture in 2003 and followed by TeRespondo (brazilian ad network), AdInterax and more recently RightMedia and BlueLithium.
So, who’s left?
There’s Google, AOL and possibly WPP. Really that’s it. Everyone else left in the online advertising space is a horde of small and medium size players either filling a niche spot or waiting to become the “next big thing”. But some other contenders may have not emerged yet. If say an E-bay or Amazon decided to buy some of these small fish, they could certainly come into the game. One interesting ‘fish’ that hasn’t made any significant move in this space is Apple. Apple cannot be sleeping, but what are they waiting for?
They have been selling iPods and iPhones like hotcakes and now have significant cash reserves ($15.4 billion). With analysts predicting they will grow 23% a year for the next five years everyone is saying they must take it out of Reno and invest it somewhere in the next 12 months. Where exactly is leaving people divided.
To be continued… “The state of Online Advertising – part 2”