Microsoft Makes Yahoo an Offer
On Feb 1, 2008, news erupted that Microsoft CEO Steve Balmer had contacted Yahoo CEO Jerry Yang and made him an offer of $44.6 billion to take control of Yahoo. If the offer was accepted, Microsoft would acquire Yahoo at a cost of $31 a share, with Yahoo shareholders either receiving cash or a stake in Microsoft in return.
The news of the bid ignited a firestorm in the industry, so much so that Microsoft set up a call to discuss the Yahoo situation. Search Engine Land was among the first on the scene to tackle the Microsoft proposal, the spin and why it mattered, while Forrester also gave us a detailed What It Means post. The reaction in the search forums was one of surprise, combined with feelings of promise.
Search Engine Land asked what a Yahoo/Microsoft marriage would look like, Search Engine Journal asked what it would mean for SEO, while Performancing tried to gauge public opinion asking readers if they thought a merger would be good or bad. Google Tutor looked at things from a different perspective asking How the Microsoft/Yahoo Merger Could Affect Google Socially, while Greg Sterling was worried about the local implications.
Industry Reactions & Implications
Google formally responded to Microsoft's proposal on Feb. 3rd with a blog entry entitled Yahoo! and the future of the Internet. Speaking on behalf of Google, David Drummond wrote that such a merger would hurt the underlying principles of the Internet - openness and innovation. Drummond stated he feared that Microsoft would attempt to exert the same "inappropriate and illegal actions over the Internet that it did with the PC".
Microsoft responded to Google's criticism, arguing that they are committed to openness, innovation, and the protection of privacy on the Internet, pointing to market share numbers that implied that it was Google obstructing openness, not Microsoft.
Industry reaction was mixed. Digital Daily told Yahoo to take the money and run, TechCrunch called it decision time, saying Yahoo either has to take the money or deal with Google. WebMetricsGuru said that a Microsoft merger would be about advertising, not search.
Yahoo Rejects Microsoft's Offer
After a long week of rumor and speculation, Yahoo finally rejected Microsoft's offer, saying they felt it undervalued the company. Yahoo insists they won't consider anything less than $40 a share, seemingly banking on an increase in the global online advertising market. Shortly after the rejection, Jerry Yang encouraged Yahoos to stay focused, and more importantly, stay on board!
Despite Yahoo's rejection, Microsoft isn't backing down. They have vowed to be more aggressive, if necessary, signaling that we may be in for a hostile takeover situation. Over at the Bruce Clay, Inc. blog, Lisa Barone spent some time explaining why Microsoft will have a difficult time forcing Yahoo's hand and what all of this means for the number two search engine.
Shuffles
The beginning of the month brought the beginning of Yahoo's reported 1,000 layoffs. Among the first on the chopping block was Salim Ismail. Also leaving Yahoo, though not as part of the layoffs, was Bradley Horowitz who departed Yahoo for Google.
Tamar Weinberg officially joined Mashable as their new Community Director. Eytan Seidman bid farewell to Microsoft Live Search, Nick Gonzalez left TechCrunch to join San Francisco startup Social Media, Strategic Ad Executive Dave Morgan signed off at AOL, and Google representative Graham resigned as the official Google Reader guide over at Google Groups.
In corporate launches, mergers and acquisitions:
Shindigs
SES London starts on Monday, 19 February and will run through the 21st. From there, search marketers are encouraged to pack their bags and head on over to SMX Santa Clara taking place on February 26-28. If you're headed to Santa Clara, you'll want to check out all of their networking activities, including the SMX Bash (Feb. 25), Search Bowl & Tailgate Party (Feb. 26), and the Google Groove (Feb. 27). Bruce Clay bloggers Lisa Barone and Susan Esparza will be providing full liveblogging coverage of the event, so make sure to check it out!
The PPC Summit will kick off in Boston on March 3-4, followed by South by Southwest on March 7-11, Portland's SEMpdx's SearchFest on March 10 and SES New York on March 17-20.
Australian SEOs can look forward to both ad:tech Sydney on 12-13 March and Bruce Clay's Australian SEO Training Course on 17-20 March.
April is chock full of SMX, with SMX Munich (page in German) taking place April 8-9, SMX Sydney on April 10-11, SMX China on April 18-19, and SMX Social Media in Long Beach, CA on April 22-23.
The Elite Retreat will land in San Francisco on April 3-4, Blogger Social is happening in New York City on April 4-6, and the eMetrics Marketing Summit (page in German) is scheduled for April 8-9 in Munich.
Attaboys
Congratulations to Ryan Freeman for being named the Grand Prize Winner of Bruce Clay, Inc.'s SEO Charity Contest. Ryan will receive a free pass to March's Search Engine Strategies New York and to our SEOToolSet and Advanced Certification Course taking place in April in return for his commitment to help The Elisha Foundation. Check out this month's Feature article for more information. Thanks to all our entrants!
A group of charity-minded SEOs have banded together to form SEOs Fight Fat, a 2-week contest ending March 31, 2008 that will challenge them to lose weight while earning money for their favorite charity.
Yahoo was voted the Most Improved PPC Program of 2007.
Word on the
Wire
TechCrunch repeated rumors that Google was gearing up to pay $1 billion for social networking site Bebo and that uStream would be acquired by Microsoft for $50 million.
Wired reported that Google was also looking to purchase content management system Plaxo for $200 million.
Nathan Weinberg speculated that Time Warner was splitting up AOL as a precursor to selling the search portal to Google.
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