Sunday, February 24, 2008

What's Happening with Micro-Yahoo!?

As you all know, Microsoft made an offer to purchase Yahoo! on February 1 and that offer was rejected. It seems that the most commonly held view on the offer and subsequent rejection is that Yahoo! realizes just how badly Microsoft needs them and that Microsoft is willing (and obviously capable) of paying much more for the company.

What's at stake is a stake in the rapidly growing online advertising industry that some project will reach $80 billion by 2010. It's apparent that Yahoo! and Microsoft both need some kind of a spark if they expect to have any chance at competing with Google over the next several years in the online advertising and search markets.

So let's assume that Microsoft will ultimately prevail in taking out the once dominant Yahoo! What is going to happen to the employees? What about the products? Locations? Culture? Etc...? Following are some thoughts on these items based on what is being said among the senior ranks at Microsoft:
* Microsoft expects that, if and win Yahoo! agrees to the transaction, it will close in the second halof of 2008.
* The number one reason for the take-out bid is stated as, "the industry needs a more compelling alternative in search and online advertising."
* Microsoft believes the R&D talent that would pick up could help them better innovate to compete with Google.
* For agencies and advertisers this would result in a more efficient management process for campaigns with a higher yield. Also, they would be pushing hard to extend the ad platform a la Google's multi-channel strategy which is something agencies and advertisers are asking Microsoft to do.
* Of course, they think this will reduce redundant expenses and increase revenue resulting in "greater shareholder value."
* On the topic of cutting duplicate positions in the merger, Microsoft mostly dodges the question pointing to the fact that MS has hired over 20,000 employees since 2005 and that there are many challenges that need to be tackled across the company. I read this to mean some people will surely get canned and that's just part of reality in any merger - especially of this magnitude.
* Microsoft would definitely retain the Yahoo! brand due to its strength in the consumer market. They will not comment on which Yahoo! and Microsoft brands would survive once the companies are combined.
* Microsoft will have a bit of a quandary with their technology integration given that Yahoo! is anti-Microsoft. I am glad to not be leading that integration process... However, Microsoft does claim that in certain cases they are good with leaving open source technologies in place and making the interoperability happen with all of their other Microsoft-based stuff. This has got to be a big concern for all of the engineering talent at Yahoo! If they migrated to MS platforms it would have a massive impact on Yahoo!'s talent pool and would likely result in a massive elimination of jobs. Even though MS s head of their own religion, I actually think it is unlikely that MS would attempt to crater all of the great technology Yahoo! has created.

The Microsoft staff has been told to continue with "business as usual" and to compete aggressively with Yahoo! on deals. They are also not to start any integration discussions until they hear otherwise.

The tone of what I am hearing out of Redmond tells me they are really serious about making this deal happen.

My bet is that Micro-Yahoo! will be a reality by the second half of 2008 and that the focus on integrating the two companies will only serve to distract them and allow Google to distance itself.

I also think emerging players should view this is a great opportunity to continue driving rapid adoption while the big three sort all of this out. For ChaCha, we believe our mobile answers capabilities are truly different than anything the search Goliaths are focusing on. I was recently asked what I thought of my partner stating that ChaCha could "blast right past" Google in mobile. My view is that the race we are running today is demonstrating that we are tapping into a massive base of demand that is not served at all by the big three. Namely, the need to simply ask a question (about anything) and get the answer on any type of phone. With ChaCha, every phone is a smart phone.

If you have yet to try it out, go ahead and text ANY QUESTION to 242242 (spells ChaCha). You will see the difference.

As for Micro-Yahoo!'s mobile plans, it looks like those are about fourth or fifth on a list that looks something like: advertising, search, video, mobile, commerce, and social media.

What do you think of this proposed merger? Will Micro-Yahoo! compete favorably against Google? Or will this all result in more distractions and less competition?

Please post a comment to let me know what you think!

Thursday, February 14, 2008

Mobile Advertising "Uncharted Territory"

In Barcelona at the recent mobile industry summit mobile advertising was discussed. Many points were raised regarding the applicability of current online ad models in a mobile environment.

"Advertising is not just a straight move from the PC to the mobile phone," Marco Boerries, head of Yahoo's mobile business, said in a keynote speech at the Mobile World Congress in Barcelona.

"We're trying to invent mobile advertising."

Mobile ad revenue estimates over the next four years range broadly - but all believe that the value of this market will be in the billions annually.

For mobile search, ChaCha's team is working to pioneer new models for mobile advertising that will deliver enhanced value to users. That's all I will mention on that... but expect more on that front from ChaCha in the coming months.

Monday, February 11, 2008

Microsoft Buys Danger to Rival Google's Android

In Barcelona at the Mobile World Congress wireless fair Microsoft announced its acquisition of Danger, maker of the Sidekick, calling it critical to winning over key mobile customers to its brand of mobile Internet.

Andy Rubin, who is heading up Google's Android open handset alliance initiative, was co-founder of Danger.

Who do you think will win the mobile handset battle waged by Google and Microsoft?

Monday, February 4, 2008

Alt Search Engines Names ChaCha Text Answers #1

Alternative Search Engines, by Charles Knight, has named ChaCha's text answers service the number one alternative search engine for February. It is great to see the leading authority on alternative search engines has again chosen ChaCha atop such an innovative group of companies.

Saturday, February 2, 2008

ChaCha Mobile Answers Save Lives :-)

I have been blogging about the great experiences ChaCha mobile answers users have been getting with texting their questions to 242242. A particularly good example of this was recently posted by Jesse Stay on his blog.

Then I remembered Cha Cha had a “Human Powered” search engine. I sent a question to “242242″ (CHACHA on your cell phone) via text message on my iPhone asking why my brother was at a standstill. Within just a couple minutes I received a response saying they were cleaning up after near white-out conditions, and to wait out until they cleared up the roads. A link was attached, which also told me there were several accidents ahead and the road was closed (I love my iPhone’s browser!). I quickly called my brother and told him the details so he could decide to find the nearest hotel and wait it out.

ChaCha definitely delivered in this case as it is in thousands of cases every day! If you want to see the full post click here.