The ad sharing deal is worth 20% of last year’s $47 billion purchase if it is worth anything
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With story from ComputerWorld and IDC
The business arrangement for Yahoo to use Microsoft’s search engine Bing and to share ad revenues is at best an 80% discount over last years offer to buy Yahoo.
The shareholders should be suing the Yahoo board of directors for destroying their $27 billion share value.
The 10 year deal means that Yahoo will give up on developing it’s search engine. When the 10 years is up, they will be so far behind the technology curve, the company will have lost any chance of market share.
Microsoft will give up a mere $800 million annually for 10 years and get to be the 2nd largest search engine, still not as big as Google.
Before giving up its search engine business to Microsoft, which only had 8% market share, Yahoo had 20% of the search engine market. Now it has none, no cash from Microsoft and a changing business model.
The details of the add revenue sharing are not known but industry analysts say that Microsoft will probably see their top line Internet advertising revenue climb despite the payments to Yahoo.
The market capitalization of Yahoo lost $4 billion since July 24th and the long term trend is downward.
Analysts are falling all over themselves to explain the deal and find some rationale.
Microsoft has one: it’s called embrace, enfold and consume. When you don’t take the money Microsoft offers you, they simple take your technology for free.
Microsoft’s first offer is always their best.
Yahoo shareholders can only hang their heads and wonder where their value went.
runescape gold
so now they are trying to use brute force to take on google…i still don’t think its gonna work..google has far superior search technology….even if you combine yahoo and microsofts technology, they still dont equal the power of google. take over in ads may be possible but not search quality.