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Microsoft Makes $45 Billion Bid for Yahoo

Microsoft has made an "unsolicited" $45 billion bid for Yahoo! in a cash and stock swap. This was a deal a long time coming and frankly, isn't a surprise for anyone in the industry. Microsoft and Yahoo have been seen flirting at the dance before.

Why now? Both are concerned with Google's ever increasing dominance in the search space. This purchase would be a merging of armies to take on Google. And considering Yahoo's inability to gain traction after their executive reorg last year, its perfect timing on Microsoft's part.

Here's the thing: If Yahoo wants to sell, this is the best deal they will ever get. Other than Google, Microsoft is the only other company rich enough to buy Yahoo. Google would never buy them and Microsoft would never offer a true merger among equals. Yahoo-Soft? Micro-hoo? No way.

But, should they do it?

In order to beat an opponent like Google, you have to be ready to fight like hell. Yahoo stopped fighting 3 years ago. Microsoft, on the other hand, loves a good fight.

This bid might have been unsolicitied, but Yahoo has already considered this option. It's already been throughly discusssed on how to approach a bid by Microsoft. In fact, it says so in their press release:

SUNNYVALE, Calif., Feb 01, 2008 (BUSINESS WIRE) --Yahoo! Inc. (Nasdaq:YHOO), a leading global Internet company, today said that it has received an unsolicited proposal from Microsoft to acquire the Company. The Company said that its Board of Directors will evaluate this proposal carefully and promptly in the context of Yahoo!'s strategic plans and pursue the best course of action to maximize long-term value for shareholders.

The last sentence says it all. Get ready for a sale.

Microsoft Launches Left vs Right

Microsoft has launched a new front end for it's search engine, Live.com. Called Left vs Right, it is reminiscent of Ms. Dewey, a former personification of Live.com.

It is a funny take on political talk shows, with two commentators primed to argue with each other based on the search term you enter. The topics are limited, and as you begin to type in a search, it shows a small drop down box that shows what searches it can provide. The timing for this is perfect as political and issue-based searches are increasing due to the current campaign season.

I still liked Ms. Dewey better, mostly because she was sassy. I like a little attitude with my search engines.

I don't know how much Microsoft spend on Left vs Right, but with their falling market share quarter after quarter, they may want to invest that money into making a better search engine. Just a thought.

Special thanks to Lara for the tip on this one. See Lara, I told you I'd do it!

Friday Recap

Ask.com gets a new CEO. Ask is doing some great things right now. I hope this does not slow down their progress.

Bill buys Fast. Microsoft said this is to fend off competition from Oracle and IBM. It's not. Everything Microsoft does in search is about Google. All the time, every time.

Critics rail Wikia. They were right to call Wikia incomplete. Founder Jimmy Wales said Wikia would need 2 years to reach any real quality. In the search realm, 2 years might as well be 20.

Microsoft and Yahoo’s Great PR Stunt

So, Microsoft wants to buy Yahoo. Or, should I say, Microsoft wants you to think they might buy Yahoo. Yahoo wants you to think that, too.

I predict there won’t be a purchase or a merger, but what there will be is a lot of press speculation. And a lot of meetings at Google over this speculation as well.

Google has been the beneficiary of mountains of press and blogging chatter over the last three weeks, mainly from the purchase of DoubleClick. How to fight this free PR buzz?

Create free buzz of your own. And that’s what this story is—all buzz.

Not even Microsoft is rich enough to drop $50B on Yahoo. It would require a true merger of the two companies, and I can’t see Gates and Ballmer agreeing to that. That's why the talks of a merger between these two titans went nowhere two years ago.

Yahoo and Microsoft have had a cordial relationship for years. I expect after a few weeks of media buzz, Yahoo and Microsoft will announce some partnership on some minor product, but that is about it. Similar to October 2005, when they announced interoperability between their IM clients.

This is a smart ploy by Microsoft and Yahoo to get everyone talking about them again. Don’t look forward to seeing a YahooSoft. Or a MicroHoo. Or, whatever you want to call it.

He with the Most Toys...

What's better than a massive data center to handle search traffic?

How about more massive data centers...

The internet arms race between Google and Microsoft took a new twist on Friday as the companies announced plans to spend more than $1bn between them on new data centres to handle future rapid growth in online traffic.

A Sassy Little Search Engine

Not long ago Microsoft revamped its search engine and rebranded it as Live.com. I think the "formerly-known-as-MSN" new and improved search engine is pretty good. Now they are trying to make it... well, sassy, with Ms. Dewey.

Who’s Ms. Dewey? Excellent question. The simple answer is she’s a sexy and sassy search engine host portrayed by actress Janina Gavankar.

The more complex answer is that Ms. Dewey is a promotional version of Live.com. It's the same search engine but to help draw attention to Live, Microsoft re-skinned it with a, dare I say it, a Subservient-Chicken-esque experience. Rather than a guy in a chicken suit, users get the attractive Ms. Dewey.

Users will gravitate to engines that they feel provide the most relevant results. Having a fun front page is a way to gather attention, and on first pass the online experience is clever and funny. But as a search experience it doesn’t work.

The interface shows very few search results. In my testing, it showed only 3 results instead of the typical 10 users have become accustomed. The window that displays the results is very small in comparison to how much real estate Ms. Dewey is provided. If they want to draw attention to the search results, Microsoft should have made the results the focus of the page.

Next, if Microsoft was trying to make Ms. Dewey sexy, they should not have given her the name of a 3rd grade teacher.

I noticed some interesting replies when typing the names of other search engines, "yo mama," and "Janina Gavankar". If you want to have a little extra fun, type in "how to get you naked." Really. Try it.

While Ms. Dewey is fun for a few minutes, the usefulness wears off with the novelty. Ultimately it does not do enough to highlight the features of Live.com.

Google to buy YouTube?

As I have noted before, Google is having trouble diversifying.

While their search product is still the market leader, so many of their other products, including Google Video, often underperforms.

What should Google do to help bolster its other products? How about steal a page from the Microsoft playbook and buy the competition.

Google is currently in talks with YouTube to acquire the company for $1.6 billion.

Microsoft is not known for originating many fresh ideas. They simply buy them from other companies, bring them inside, them market them.

A new trend for Google?

Why MSN AdCenter will Fail

MSN launched AdCenter this year to close the gap with Google and Yahoo. In terms of market share, MSN sits precariously in third place trying to convince everyone they are a worthy contender.

Third place is not a position Microsoft likes to be in. Nearly every industry has a "fight-like-mad" Microsoft story. Will search marketing experience the same?

Not a chance.

AdCenter has some really nice features as part of the tool and it is easy to use. But the reason why they will not gain traction here is simple – lousy customer service. I have experienced long response times, inability to answer questions, and a basic unwillingness to engage.

Google and Yahoo reps are quick to respond, very helpful and seem to be genuinely interested in helping to set up a pay-per-click campaign that will be successful. They make it clear they are willing to help. Microsoft, on the other hand, acts like, well, Microsoft. No one wants to deal with their hubris, especially in an industry where they are third at best.

Sometimes big companies fail to realize that it is still basic customer service that can undo sales. I work with Fortune 1000 clients. I can imagine what it is like for small advertisers.

While PPC campaigns need to always be about the client’s business objectives, what do you think people like me will suggest to our clients when they ask for a recommendation? I know that I can provide great market reach and customer results with a Google/Yahoo combo. Why is Microsoft failing to help advertisers see the value in their product by treating them like they don't care?

Top 4 Sites in Global Traffic are Search Engines

From time to time, I pop over to Alexa's Global Top 500 out of curiousity. I'm not the least bit suprised to see the top 4 are search engines—Yahoo, MSN, Google and Baidu, a Chinese search property.

(The 5th spot is held by QQ.com, an instant message service in China. If my memory serves me correctly, the search feature there is run by Baidu. So one could argue that the top five are all search properties.)

The top spots have changed slightly from when I last posted about this 3 months ago. Not to sound like a broken record, but I will repeat the point I made then: A few years ago, companies (and individuals) wanted to list their products on Amazon and eBay because that is where the eyeballs of the world were. Where should you list your products today?

Technorati Tags: alexa, china, baidu, qq

Yahoo!, Microsoft Acting like Friends

I try to stay focused on search-related topics. Which is why I rarely cover other products released by search engine companies (notice my lack of entries on Yahoo! Answers, or the rumors of Google entering the Radio Ad market, for example) unless I think it will have a specific impact on their search offering.

I'm intrigued by the news that Yahoo and Microsoft are going to make their respective instant messaging clients interoperable. This is not typical Microsoft behavior. They usually demands other companies, and even customers, bend to their own standards.

This is going to re-ignite rumors of a Yahoo-Microsoft merger, which could be Microsoft buying Yahoo outright, buying a partial stake or a true merger, depending on who/what/where you read. The two companies have reportly been discussing various options for more than a year.

Microsoft has announced their intention to spend upwards of $2 Billion in 2007 to catch Google. Could this new business colaboration with Yahoo be part of a larger goal?

This all reminds me of the Arab proverb: The enemy of my enemy is my friend.

Does Size Matter?

In an article titled, "Hiding in Plain Sight, Google Seeks More Power" in the NYTimes today, we get a peek at one of the major fronts in the search war -- server space.

Two interesting quotes from the article:

Today even the closest Google watchers have lost precise count of how big the system is. The best guess is that Google now has more than 450,000 servers spread over at least 25 locations around the world.

...and...

Microsoft's Internet computing effort is currently based on 200,000 servers, and the company expects that number to grow to 800,000 by 2011 under its most aggressive forecast

That's a lot of servers, but one important thing to point out. Microsoft's farm will be running windows. At least 100,000 of those servers will crash every day. =^)

Vacation Post 2

Another quick vacation post before I wander up into the Rocky Mountains for some kid-friendly hiking.

Google extends market share for ninth straight month, as reported by CNET. Anyone actually surprised?

Steve Wozniak's memoir will be out soon. I would not expect this Steve to sling any mud at the other Steve, but I did notice that he is complementary of the search industry, saying "Google and Yahoo! are very innovative."

Bill Wise on why he thinks MSN Search will move up. I think he has some valid points, but the major issue facing MSN Search is not technology, but branding. Google is a hot, exciting brand -- Microsoft is the polar opposite.

Hyphens or Underscores in URL? Do What the Engines do.

Not long ago, in one of my "Searching for Truth" articles, I posted about the difference between and preference for using hyphens or underscores in a URL.

Quick recap: If a company sells Blue Widgets and they want to rank high for searches related to Blue Widgets, one of many techniques to use is to include the keywords in the URL. Which is more effective, an underscore (www.YourSite.com/Blue_Widgets) or a hyphen (www.YourSite.com/Blue-Widgets)? The question revolves around if an engine is more likely to see Blue_Widgets or Blue-Widgets as two distinct words.

I went into this topic in much more detail in this post, where I also stated my opinion.

While I posited my preference for underscores, a Google engineer named Matt Cutts clearly states that hyphens should be used.

Search engines keep their algorithms under lock and key. People like me often work like detectives to figure out the best ways to optimize sites, using all sorts of information as our guide.

One thing I rely on is simple observation of what the engines themselves do. Obviously they are going to optimize their own sites against their own algorithm.

For example: want to see if MSN Search uses meta tags? Just hop over to www.Microsoft.com and view the source code. Since the webmasters of Microsoft went to the trouble of adding meta tags, it's a safe bet that MSN Search reads them. (How they are factored into the ranking algorithm is another issue.)

So in the case of the hyphen/underscore debate, let's take a look at what Google does, which is highly revealing.

Matt Cutts says to use hyphens, yet on Google.com the underscore is in use. One needs to look no further than the home page:

The URL for the language tools is: http://www.google.com/language_tools?hl=en
Google's Advanced Search page: http://www.google.com/advanced_search?hl=en

If Google will use an underscore, then the algorithm must be able to determine that “language_tools” is two, distinct words. But then again, Google doesn’t worry about rankings for their own site. But they should follow their own advice, if that advice is truly important.

From my experience, I have seen no difference in results between an underscore and a hyphen. My guess is that it doesn't really matter from Google's perspective if you use hyphens or underscores, in the same manner that it rarely matters if you spell the search term correctly anymore. Google easy adjusts for our lazy spellings.

Some may prefer to do what Google says, but I would rather do what Google does. Or is this a case of do what I say, not what I do?

Technorati Tags: google, meta tags, msn search

Highest Trafficked Sites on the Web are Search Engines

Not so long ago, Amazon and eBay were the top trafficked sites on the Web. They would alternate at the top spot, as the web's head honcho.

Authors wanted their books listed on Amazon, and individuals and companies selling nearly anything under the sun wanted to be listed on eBay. (And they still do, they are great resources.)

According to Alexa’s traffic rankings, Amazon and eBay have been displaced by (surprise!) search engines. Yahoo, Google and MSN hold the top three spots in global traffic and US traffic.

A few years ago, companies (and individuals) wanted to list their products on Amazon and eBay because that is where the eyeballs of the world were.

Where do you want your products listed today?

Technorati Tags: google, msn, ecommerce, seo, search, yahoo

Search Grows by 630 Million Searches in a Single Month

Just when the marketing industry was wowed by reports of increased search usage, newer statistics indicate the growth is continuing.

According to Nielson//Netratings, their were 5.7 billion online searches in January in the top 60 search engines, making it the most active search month ever recorded.

That is a whopping 630 million more searches than the month before!

While a slight post-holiday decline may have been expected, the reach of search marketing is stronger than ever.

While this is great news for the industry itself, it is a bit of a dark cloud for MSN Search. Despite this incredible growth, only Google and Yahoo! experienced increased market share. While each grew one point, MSN Search’s share declined by two points.

I guess buying searchers must not be working for them.

Think Google Doesn’t Use Meta Tags? Think Again.

The most common reason I hear other search marketers site for not to use Meta tags is, "Google ignores them."

While I have expressed my support for Meta tags in the past [here and here], there is plenty of evidence that Google does indeed index tags.

I went to Amazon.com and pulled up a page for a popular book. In this case I used The World is Flat, by Thomas Friedman. [Amazon link]

Amazon.com includes Meta tags for each product listing. In this case of The World is Flat, they are:

meta name="description" content="Amazon.com: The World Is Flat: A Brief History of the Twenty-first Century: Books: Thomas L. Friedman by Thomas L. Friedman"

meta name="keywords" content="The World Is Flat: A Brief History of the Twenty-first Century,Thomas L. Friedman,Farrar, Straus and Giroux,0374292884,Diffusion of innovations,Economic aspects,General,Globalization,History & Theory - General,History: World,Information society,International - Economics,International Economic Relations,International Relations - General,Politics - Current Events,Social Forecasting,Social Science,Social aspects,Sociology,Social Science / General"

Note: opening < removed to ensure proper display.

Then, I checked Google’s listing for this specific page.

[Click image for pop up with more detail]

As you can see, Google is displaying a description that was taken directly from the Meta description tag.

Since the Title tag and Meta were so similar in this example, I decided to try another site – Microsoft.com.

Microsoft.com Meta tags:

meta name="KEYWORDS" content="products; headlines; downloads; news; Web site; what's new; solutions; services; software; contests; corporate news;"

meta name="DESCRIPTION" content="The entry page to Microsoft's Web site. Find software, solutions, answers, support, and Microsoft news."

Note: opening < removed to ensure proper display.

Google’s listing for the Microsoft.com home page pulls the Meta description tag directly.

[Click image for pop up with more detail]

Does Google Ignore Meta Tags?
The issue comes down to what other search marketers mean by the word “ignore.” Clearly, Google does not ignore Meta tags, but they likely do not use Meta tags in their ranking algorithm, as they are often a target of keyword spam abuse.

As an added bonus, the Microsoft.com example also proves that MSN Search uses Meta tags. Microsoft would not have taken the time to put Meta tags on the home page if their own engine didn’t use them.

MSN to Offer Bribes for Searchers

MSN is going to offer prizes to searchers in an effort to peal market share away from Google. Yahoo! is said to be considering a similar offer. Details of MSN’s plans can be found here: MSN Search and Win.

This would be interesting if it were novel. IWon started in this fashion by offering cash prizes to users who searched and read news stories on their site. They still offer prizes, including a chance to win $25 million.

Despite this, IWon has zero market share.

Google is in the lead for a single reason – relevant results. No gimmicks, slight-of-hand or cash bribes needed. Until MSN, or any other engine for that matter, produces results that searchers find as or more relevant, Google will continue to lead the pack.

Google in the Lead

According to comScore Media Metrix, Google increased its market share, leading by a full 10%. With a marketshare of 39.8%, Google widens its lead over Yahoo! with 28.5%, and MSN with 14.2%.

For some, this will reinforce the "follow Google" movement. Far too many search marketers disproportionately focus on a single engine, which can reduce the effectiveness of a search campaign. After all, Yahoo (with "only" 29% of the market) is still a doorway to a huge audience.

I have written about this twice before, and I think it offers valuable perspective if you are looking at optimization and banners. (Article links: Widen the Point of View and Lack of Search Loyalty)

In short, don’t let your search marketing firm focus to closely on Google, or any single engine.

MSN Search's Speedy Spider

Google has a sandbox. Yahoo! appears to have something similar. Basically, a system in place to hold a new site for a few days (or weeks) before it is fully indexed by the engine's spider.

In the past, this type of behavior was likely because of massive Web growth. Lag periods were simply spiders trying to catch up to newly launched sites.

That's not an issue today with current technology. Case in point: MSN Search's speedy spider.

Over the past months, I have seen new sites (and new pages on existing sites) fully indexed in a little as a day! MSN Search's strategy is to be aggressive and clearly they are by indexing sites as quick as possible.

It's Getting Crowded in Here

By 2007, the pay-per-click arena is going to be crowded.

In the last few weeks, several search properties have announced new or upcoming pay-per-click programs. Ask Jeeves announced a pay-per-click system to augment Google's pay-per-click method they use now. MSN Search has also announced more details on a PPC model that they call MSN Keywords, followed by Yahoo’s announcement of an ad network for smaller to mid-tier publishers.

Up till now, there were basically only two choices – Google's AdSense Program and Yahoo Sponsored Search (formerly Overture). With all the new choices, how do you get started with a pay-per-click campaign? Think about print ads.

I'm not suggesting you place print ads instead. I’m advising you think of the methods of placing print ads. Marketers place print ads based on where the target audience is.

With pay-per-click, marketers mostly factored in budgetary concerns. But as the arena gets more crowded, a search engine's demographic will be an important factor to make sure your ads are reaching the right eyes – and capturing the right clicks. A mouse click (just like a print ad impression) from someone outside your target audience is a lead that is less likely to convert, lowering the overall ROI.

For example, comScore data from June showed Yahoo, MSN, AOL and Ask Jeeves, skewed toward women, whereas Google has a higher percentage of male users. There are many ways, of course, to analyze demographic information. And it will be an increasing factor in the overall search strategy, especially to companies that have limited pay-per-click budgets or want to start of small to test the waters.

A Useful Screensaver... Finally!

Screensavers don’t really save screens anymore. Back in the day, a screensaver would keep an image from being permanently burned into the tube, but monitors are well beyond that now. Screensavers merely act as a way to keep your coworkers from seeing your desktop while you are away.

Why has no one tried to make screensavers… well, useful? MSN Search has finally given us reason to get ride of those annoying 3D flying pipes!

The new MSN Screen Saver allows you to personalize it with real content, including search integration. You can also add RSS feeds of your choosing, local weather, and your own personal photos.

You can download the MSN screensaver here.

Search Toolbars for your Browser

Last week Google has released the beta version of their essential toolbar for Firefox. I know many users that were holding out on switching browsers because they felt they couldn’t do without their trusty toolbar. Overlooked in this news however was Yahoo’s toolbar for Firefox.

Since many search engine companies play follow the leader, I will be interested to see if other toolbar applications, such as Alexa’s, follows suit. Most telling would be if Microsoft releases a Firefox build of their MSN Search bar.

Toolbars for your downloading pleasure (in no particular order):

Alexa Toolbar

Google Toolbar

MSN Search Toolbar

Yahoo Toobar for IE
Yahoo Toolbar for Firefox

AltaVista Toolbar

AskJeeves Toolbar

Dogpile Toolbar

Teoma Toolbar