Microsoft puts in $44.6b offer for Yahoo!

1/02/2008 at 13:31

Microsoft has today shaken up the rumours over who will acquire who this year with an offer of almost half a trillion dollars for Yahoo!

The real question is, if the offer is accepted, how it will change the landscape of ecommerce shopping. There have been rumours about a possible merger of eBay and Yahoo!, especially as Yahoo! have been closing their shopping sites in recent times.

eBay are lacking search and rely on companies like Yahoo!, Google and MSN for traffic. Yahoo!, Google and MSN all have search, but largely are not destination sites where transactions take place. In the middle are a myriad of shopping comparison sites which direct transactions from buyers Internet searches to merchants ecommerce websites.

Into the mix throw increased competition from Amazon who go from strength to strength, along with merchants own ecommerce websites and any merger is going to affect online sellers to some extent.

Although Google is the undisputed leader in search, including paid search, a joint Microsoft/Yahoo! partnership could become a real contender. Competing for the paid search from comparison sites and destination sites such as eBay is all about the return on investment. Many merchants have found success with Yahoo! relative to Google as there is less competition and thus lower cost to buy keywords in paid search.

Historically Microsoft were late to embrace Internet, for them acquiring Yahoo! will gain a well established, respected brand. One thing is for sure a Microsoft/Yahoo! merger could bring benefits for buyers, advertisers and publishers, as well as giving Google a bigger competitor to keep them on their toes.