The Big Wave Blog

How much for the puppy in the window?
The offering price is $44.6 billion, or $31 per share, consisting of one half cash and one half stock. This represents a 62% premium over Yahoo’s Jan 31 close of $19.18 per share. The last time the stock closed above $31 was November 5, 2007.

It has been a long affair.
A deal along these lines has been rumored for at least 18 months, with various analysts and media sources predicting such a move. Talks between the two companies started in 2006. The search marketing industry has been speculating about this deal for a long time. Personally, I am glad to see the offer on the table!

The bigger they are, the harder they fall.
This would be the biggest Internet deal since the Time Warner-AOL merger for $182 billion (we know what a disaster that was!) Heavyweight transactions like these always have a major outcome. Their success or failure depends on the people who control what happens after the deal is done.

Microsoft Boardroom Squawk.
Microsoft Chief Executive Steve Ballmer:
“We have great respect for Yahoo, and together we can offer an increasingly exciting set of solutions for consumers, publishers and advertisers while becoming better positioned to compete in the online services market.”

My translation:
Microsoft is ready to enter the game. MSN Live is finally set up the right way to sell search ads, and the Live Search platform looks good. Now what they need is traffic….Yahoo TRAFFIC.  Oh, and those awesome Yahoo properties would be a nice icing on the cake. Yahoo news, Flickr, Yahoo Mail, Instant Messenger, Finance (beats Google Finance hands down), Del.icio.us social bookmarking, etc.

Google, we are coming for you. (Insert Steve Ballmer angry face here… grrrr!)

Yahoo Boardroom Squawk.
Yahoo responded by saying its board will review Microsoft’s proposal in the “context of its strategic plans” and will “pursue the best course of action to maximize long-term value” for its shareholders.

My Translation: 
Yahoo!!! (no pun intended) OK, finally a decent offer on the table. Shareholders are running out of patience and we can’t get our act together. Here comes a solution… sell, sell, sell!

What this means for search engine marketing.
If the deal happens, there is going to be a huge impact on the search marketing industry. How Microsoft chooses to brand its new acquisition is going to make all the difference. One less ad platform to manage might be great for paid search marketing teams. But who will survive? Panama, or the newly revamped MSN adcenter? Yahoo had the Madison Avenue advertising dollars, but Microsoft has the cash to get things done.

This merger could have another very positive outcome by controlling Cost Per Click (CPC) inflation. To compete with Google, they will have to put major empasis on web search, where Google is clearly dominating the market.

These are interesting times for search marketing. The new entity that is created might be the only hope of ever putting a check on Google’s domination of the search engine marketing business.

What’s in a name?
What should the new entity should be called? Mahoo or Ysoft? Do you have a better name? Send me some!