SEO Blog

“I don’t want the whole world, I just want your half.” - Ana Ng, They Might be Giants, 1989

Yahoo! might have wriggled free of Microsoft for the time being but it is now getting closer to Google than many PPC experts are comfortable with. Yahoo!’s overt flirtations with Google proved to be the ultimate poison pill that turned away Microsoft’s uninvited attentions.

Most in the search marketing community were rooting for a deal between Microsoft and Yahoo!, not because we love Microsoft or dislike Yahoo!, but because we felt that the combined forces of the two mega-firms would provide a truly capable competitor to Google. That didn’t happen. As it stands today, we’ve transited from a potential to create greater competition to the very real potential of seeing far less competition in the lucrative PPC marketplace.

On yesterday’s Webcology show on WebmasterRadio.fm, we explored the Post MicroHoo environment with Search Engine Watch Executive Editor Kevin Heisler and WorldBenefactor.com co-founder Greg Meyers. (Greg also publishes the blog SEMGeek.com).

It was an interesting conversation. Kevin covered the business ends of the equation and Greg passed out several tips on PPC bidding strategies his non-profit WorldBenefactors.com site is adopting in the post MicroHoo world.

This is just a quick speculative post. I’ve been watching Yahoo!’s stock performance since yesterday’s opening and have been pleasantly surprised at the direction shares prices are going in. Believe it or not, they are generally going upwards.

Yesterday, YHOO opened at $23.28 per share and rose gently through the day to close at $24.37 per share. This morning, it opened far higher at $25.55 per share, instantly fell to $24.20 per share and then quickly rose to peak at $26.03, the point they trade at right now (12:10 pm-pacific).

This was NOT an expected outcome. When Microsoft CEO Steve Ballmer openly closed the door on a deal, observers anticipated immediate and extraordinary losses for Yahoo!’s shareholders. Though down from their Valentine’s Day peak of $29.98, YHOO is still trading well above their low of $19.18, the day Ballmer announced Microsoft’s acquisition attempt.

Donning my counter-intuitive thinking cap, (and opening this round of speculative writing), I’ve been trying to make sense of Yahoo!’s NASDAQ yo-yo act.

Reading through the Technology section of the online New York Times this morning, I was confronted with a question that reminded me why there is a thin edge of hope for Yahoo!. The question itself was very basic, requiring a simple Yes or No answer. The implications of asking me this question, especially this morning, shows the potential depth of one of Yahoo!’s greatest assets.

The question, which is probably meaningless to anyone living in the United States, South America, Europe, Asia, Africa, the Middle East and even most of Canada, involves the fate of a brand-character for a regional beer brewed and sold in British Columbia. Just above the article content, a banner ad asks, “Should the Kokanee Ranger Live or Die?“  Believe it or not, it is a rather important query ringing in the ears out here.

So here I am, sitting at the southern tip of a rather large but isolated island on the far-west coast of North America reading news published on a far less isolated island on the far-east coast of North America and I get confronted with a banner ad promoting a regional beer that has absolutely nothing to do with New York. Neat eh?

REDMOND, Wash., May 3 /PRNewswire-FirstCall/ — Microsoft Corp.
(Nasdaq: MSFT) today announced that it has withdrawn its proposal to
acquire Yahoo! Inc. (Nasdaq: YHOO).

The news came out of Redmond Washington early Saturday evening. Microsoft CEO Steve Ballmer announced that Microsoft was walking away from their attempt to acquire Yahoo!.

In a long letter (reproduced below) to Yahoo! CEO Jerry Yang, Ballmer outlines his decision and is clear about his disappointment with the outcome. Ballmer is less clear about his future intentions, leaving the door open for another acquisition attempt while falling back on Microsoft’s oft heard but unproven mantra, “We Can Do Search Ourselves”.

Over at Search Engine Land, Danny Sullivan has written a definitive analysis of the weekend’s events, (Leaving Las Yahoo: Microsoft’s $5 Billion Mistake?) and Yahoo!’s multiple options, including links to several other takes on Ballmer’s $50Billion Balk.

I don’t think this is exactly over yet. Tomorrow morning will give us a better idea what Yahoo! shareholders think as the markets are certain to react swiftly.

Steve Ballmer’s Letter to Jerry Yang:

May 3, 2008

Mr. Jerry Yang
CEO and Chief Yahoo
Yahoo! Inc.
701 First Avenue
Sunnyvale, CA 94089