There's a lot of press out there predicting that the incipient Microsoft takeover of Yahoo is doomed to fail. It's the dominant meme.

However, one set of potential users is rooting for it: People who buy search ads.

Andrew Goodman estimates at the London SES conference, attendees are for the merger at a 7-to-1 ratio.

When you look at it, it makes sense, and I've highlighted the key reason before:

Google market share in search is something like 60-65%, and in Europe, it's higher.

Yahoo's share is currently around 25%, and Microsoft is about 10%.

Put together Microsoft and Yahoo, and you have a decent #2 at 35% share.

Simply put, PPC buyers want to go to fewer places, and want a more viable alternative to Google.

Microsoft could throw away most of Yahoo, except Mail and the front page, and have hopes to turn this acquisition into something useful - simply because search is where the money is! Sure it's expensive just to compete with Google in search, but when you are Microsoft, you need to protect your cash cows from incursion by Google.

I think Ballmer's best option and natural tendency is to go after Google's cash cow. Yahoo's really the only way to do that.

I'm still pretty sure Microsoft's current management isn't the team to do it, but at least you can understand why it makes sense from a PPC buyer point of view.

Labels: microhoo, microsoft, yahoo

¶ 2/20/2008