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Dear Microsoft, Thank You! Love, Barry Diller


Barry Diller: Microsoft, how do I love thee? Let me count the ways.

1. Your deal with Yahoo shadowed our poor Q2 financial results.

While the whole world focused on the minutiae of the search deal between Microsoft and Yahoo, Diller’s IAC released its quarterly numbers. They weren’t up to analyst estimates, so I’m sure Diller was glad to have the insulation offered by the Microhoo hype.

IAC said revenue from its media and advertising unit, which includes search engine Ask.com, fell by 10% to $168.6 million. The company’s overall revenue declined 4% to $340 million.

2. When our deal with Google expires in 2012, we now have options.

Diller expressed enthusiasm for the deal between Yahoo and Microsoft because is provides him with leverage when his current search deal with Google expires on Dec 31st 2012. With a stronger alternative, Diller will have a better chance of negotiating more favorable terms.

"We do better when there are two big competitive forces out there." Diller said "the plot" right now is for IAC to boost the value of its searches—making it even more crucial to consumers—in order to stoke a bidding war with what he expects to be two hungry competitors by then. "I want to have two players out there," he said during his conference call. "That’s good for all parties."

3. You did what I couldn’t–move Ask.com up to #3 in search share.

It’s probably not the way that Diller had envisioned Ask.com achieving the #3 spot–he would have preferred that Ask had organically increased its share of searches–but I’m sure he’ll take it. With Yahoo effectively out of the search engine business, Ask.com moves up to the third spot. That said, Ask.com shouldn’t get too excited. Hitwise data suggests that Ask.com and 53 other search engines share just 3.4% of market share.

Any other ways that you think Diller’s loving the Microsoft/Yahoo deal today?

  • http://www.seo-theory.com/ Michael Martinez

    Actually, what Yahoo! should have done was partner with Ask to serve search results. Ask could have struck a pretty good deal with Yahoo! for advertising.

    Carol Bartz has sold Yahoo! up the river by outsourcing its core business structure and leaving Microsoft in a position to suck all the life out of Yahoo!’s search and advertising position.

    An Ask/Yahoo! partnership make more sense because Ask is still dedicated to developing technology, it has the most superior search technology, and their combined inventory would work almost as well as a Microsoft-Yahoo! combination without strengthening the number 2 search engine.

    It would also deprive Google of revenues (albeit in 2012, not 2009).

  • http://www.technologyslice.com.au TSlice

    Hopefully this will mean viable competition to Google.

  • http://blog.lbi-netrank.co.uk/author/ian-macfarlane/ Ian Macfarlane

    Interestingly, it looks like Ask Jeeves is using Google-sourced algorithmic search help already in some way. I did a bit of research which showed that Ask Jeeves had pages in its index which could only have been spidered by Googlebot.

    http://blog.lbi-netrank.co.uk/is-ask-jeeves-scraping-google/

    (sorry this comment is a bit tardy … my feed reader has eaten too many feeds, and probably needs a diet)
    .-= Ian Macfarlane´s last blog ..Microsoft to include browser ballot screen in Europe =-.