Last week, here at Crenk we reported that Microsoft and Yahoo! are entering into a deal to combine search technology and the revenue from their engines in a bid to strike Google who has a share of around 65% of the global market. Yahoo! and Microsoft barely have 28% – combined.
It has emerged that the companies’ lack of market holding has led to Yahoo! putting a clause in the agreement which states that Yahoo! can back out of the deal at any time before the scheduled five year renewal if their revenue share falls too low.
Yahoo! and Microsoft failed to specify what exactly the number was that would entitle Yahoo! to pull out should revenue fall below it however it is expected that the danger zone will be in the first eighteen months.
This is because any new service, whether continuing on from an old one or starting from scratch will experience growing pains. A few other details have emerged since the deal was officially filed with the US Securities and Exchange Commission.
For example, Microsoft must hire 400 Yahoo! engineers and pay them “market-competitive” wages. Furthermore, a full deal must be struck by October 27th otherwise the debates will be brought to a arbitration panel. Time is money.
I guess now we all have to play the waiting game. I wonder in two years time will be caught saying “I Binged myself and I’m 5th in the search results!”.
Are Live Nation and Ticketmaster planning to merge? According to a Wall Street Journal report emerging Tuesday evening, the answer is yes. The paper noted that the pair are “close to a merger,” citing “people familiar with the matter”. The tie-up would effectively combine the largest live concert conglomerate with the biggest ticketing company, resulting in a massive conglomerate. The deal, expected to be cashless, could be announced in a matter of weeks, according to the report.
Sounds like a big deal, though regulators could hold up the marriage. That is no small consideration, especially in light of the massive delays experienced by recent newlyweds Sirius Satellite and XM Satellite Radio. Those partners required both the approval of the US Department of Justice and Federal Communications Commission (FCC), though the Justice approval on its own was quite lengthy.
Other issues are also worth noting. Live Nation just launched a homegrown ticketing service; a merger could effectively nix that attempt. Moreover, it remains unclear which party is actually acquiring, and where the top executives would land.
The soap opera that is Microsoft bid for Yahoo is continuing. Firstly it is reported by the WSJ that Yahoo is closing in on a merger with AOL. If the deal goes through, the two companies would combine their web and internet based services. Yahoo! would reportedly use some of the revenue from a merger with Time Warner/AOL to buy back a whole bunch of stock which woudl help the company fend off any further unwanted advances from Microsoft.
While at the same time it is reported that Yahoo has begun testing out Search Ads from Google. Then Microsoft hit back with the following statement about the search testing:
From Brad Smith, Microsoft’s General Counsel:
“Any definitive agreement between Yahoo! and Google would consolidate over 90% of the search advertising market in Google’s hands. This would make the market far less competitive, in sharp contrast to our own proposal to acquire Yahoo! We will assess closely all of our options. Our proposal remains the only alternative put forward that offers Yahoo! shareholders full and fair value for their shares, gives every shareholder a vote on the future of the company, and enhances choice for content creators, advertisers, and consumers.â€
Well, what can I see happening? I expect that AOL and Yahoo will potentially merge, but this it might happen in about 6 months time. In terms of search advertising between Google and Yahoo, im sure this cant continue because of the amount of marketshare they will have between them. Finally, Microsoft have no chance of purchasing Yahoo, I cant see it happening because Yahoo shareholders and directors would have already agreed if there was something that was going to happen.
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