I’ve just been pointed to a masterful article about the proposed Microsoft acquisition of Yahoo.
You know, I thought I’d written in below, about how a service company (Yahoo) and a product company (MS) would have integration problems - an issue I’ve seen before in startups where competent managers in one type of operation failed to build a company in the other sphere. This article spells that out and supplies other great detail.
I’ll have to re-read the Roughly Drafted article and see if I can pick some holes or offer some amplifications, but the general thrust is compelling. Right now, I still do see an opportunity for advertisers. But for the companies involved, a mutual cooperation agreement for an approach to advertisers looks healthier than an acquisition. For search agencies, the fewer the number of outlets, the lower the costs of managing them all and the larger the addressed audience… The cost savings of managing the combined share of market through only one interface, MSN or Yahoo, could improve the attractiveness, especially for smaller accounts in Europe. As the Rough Draft article spells out, that’s probably not enough to make the business case.
