Marketing Pilgrim

With this weekend’s news that Microsoft has withdrawn its offer to purchase Yahoo, the news media is having a field day analyzing the “if,” “ands”, and “buts.” Instead of regurgitating the same stuff, let’s take a look at the winners and losers here.

Losers

• Yahoo: It should have taken Microsoft’s increased offer. There were no other suitors in sight, and Google is hardly its best pick for a knight in shining armor. I don’t expect the market to be kind to Yahoo today, and I suspect employees are deflated, not elated.

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And so the Microhoo saga continues.

The Wall Street Journal reports that Microsoft plans to allocate $1.5 billion dollars to employee retention if the merger goes through. This is according to court documents in a shareholder lawsuit cited by the WSJ. According to CNET:

The documents include transcripts of a March 24 conference call hearing between attorneys for Yahoo and two Detroit-based pension funds. During the call, a Yahoo attorney noted Microsoft had informed the company that it “earmarked $1.5 billion for employee retention at Yahoo,” cites the Journal.

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Is the future of advertising networks in the hands of those that decide to build their own? Cox Enterprises must think so as it has shelled out a rumored $300+ million for Adify, a self-service ad network that enables publishers to build their own ad network.

According to paidContent, Adify had been on the scout for investment funding but instead found a buy-out deal even more tempting.

Cox, long an advocate of targeted advertising, the company can well afford an acquisition like this—particularly if it can find a way to blend the niche ad net power with its digital cable products while it continues to make money from third party

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BuzzLogic, an “online influence-targeting company” (reputation management to the rest of us) has announced the acquisition of Activeweave.

You’ve probably not heard of Activeweave, and you may not even care about the company. In fact, I’m not too sure if BuzzLogic even cares about Activeweave as a company. What it does care about is that Activeweave owns the cool browser application BlogRovR.

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Just a couple weeks ago, there were rumors running around that Google was looking to buy Skype off eBay—er, from eBay. While that rumor hasn’t materialized (yet), eBay has now admitted that they may sell off Skype later this year.

The Financial Times is reporting that eBay CEO John Donahoe would be willing to part with the P2P/VoIP company if they couldn’t find a way to integrate it with their core eCommerce business. Donahoe replaced Meg Whitman as CEO two and a half weeks ago.

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How would you like to create a blog widget and then sell it less than three years later for $25 million? Ah yes, the dream of all internet marketers.

Well, Sphere–the creator of the Sphere Related Content Widget–was just acquired by AOL for a rumored $25 million. At this point, you’re probably asking yourself one of two questions (maybe both):

1. I’ve never heard of Sphere, what does it do?
2. What does AOL want with Sphere?

That first question is easy to answer. You’ve probably seen Sphere in action, but perhaps never paid much attention to it. Here’s how the company describes itself:

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If the Yahoo/Microsoft deal is to going happen at all, analysts think that it’ll happen this week, according to CNET. Despite having rejected the initial offer long ago, Yahoo is still feeling the pressure for several reasons. Two deadlines are looming for Yahoo: Q1 reporting and Microsoft’s latest ultimatum deadline.

Yahoo’s Q1 2008 reports are due out on the 22nd (next Tuesday), and analysts don’t expect much from them. Thomson Financial says that the Wall Street consensus is $1.33B in revenue, or 9¢ net income per share. (Compare this to their Q4 2007 numbers of $1.8B in revenue and 19¢ net income per share.) A disappointing Q1 could be a sign that Yahoo was “distracted” by Microsoft’s offer, as Derek Brown of Cantor Fitzgerald told CNET, but it could also be a sign of the company’s failing confidence.

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Google’s acquisition of Urchin–and subsequent decision to offer Google Analytics for free–certainly changed the web analytics landscape. With measurement of traffic and ROI an important part of convincing advertisers to spend more of their online ad campaign on paid search ads, Google and Microsoft–with its upcoming Gatineau–understand the value of providing such tools to marketers.

Today, the light bulb came on for Yahoo.

[Yahoo] today announced that it has entered into a definitive agreement to acquire substantially all of the assets of Tensa Kft., more commonly known as IndexTools, a leading provider of Web analytics software for online marketing….Upon completion of the acquisition, the addition of the IndexTools’ assets is intended to expand Yahoo!’s powerful set of services designed to maximize its clients’ online marketing efforts.

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There are so many different ways of looking at the ongoing (non) negotiations between Yahoo and Microsoft. Judging by the letters that went back and forth this weekend, you’d think it was a conversation going on between two arguing parents: “You can tell your Mother, that my offer to take her to Wendy’s for dinner, is fair and final.”

Instead, I think it’s more appropriate if we look at the antics as some kind of “dowry” negotiation. When you boil it all down, it’s as simple as this.

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Despite what foolery you may read today, Microsoft has no plans to raise its $44.6 billion bid for Yahoo.

According to the WSJ…

Such pronouncements are standard in deal negotiations but people close to Microsoft insist the stance isn’t posturing. While speculation has swirled that Microsoft was poised to raise its bid, Microsoft is instead biding its time. The software giant likely hopes to use the potential of a sweetened offer to lure Yahoo into serious discussions. So far the two sides have only had one meeting.

"There’s no reason to bid against ourselves," one of these people said.

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Microsoft has announced that they have acquired Rapt, a “provider of advertising yield management solutions for digital media publishers.” This will help Microsoft to provide “integrated asset and inventory management, forecasting, yield and sales management, and ad delivery and operations” through the Atlas Publisher Suite. Ah, the smell of buzzwords in the afternoon.

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As you’ve probably heard AOL today announced the acquisition of social networking site Bebo for $850 million.

Sure, we could discuss how this will help AOL turn AIM and ICQ into an uber-social network. We could also discuss how Yahoo and Google let this slip from their grasp. But, here’s the question I’d like to ask…

Does this prove that social networks are approaching their own “bubble?”

For the past year, we’ve heard rumors that Bebo is up for sale. Valuations have typically placed the social network in the $1 billion to $1.5 billion price range. Now, after weeks of speculation that internet users are tiring of social networks, Bebo sells for just $850 million–almost half the top-end valuation thrown around last year.

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