After last Friday’s “Wall Street shakeup” due to Microsoft’s $44.6 billion bid to acquire search engine competitor Yahoo, most industry analyst are only thinking about what this acquisition would mean economically for Yahoo and MSN. But I think there is a bigger question that needs addressing. What would it mean for online advertising and search engine marketing?Here are some possible scenarios:
- Scenario #1 - Universal Paid Search Marketing Platform. Microsoft will manage both companies separately, keeping their product lines intact, but create a universal paid search platform that can be used to advertise in both the Yahoo and MSN Live search engines. Now, as great as it would be to have a universal search platform for uploading campaigns, this idea might actually increase the overall cost-per-click(CPC). Why? Because the majority of advertisers will opt for both engines if they no longer have to take the time to upload 3 separate campaigns (Google, Yahoo, MSN). More of the competition will be advertising in both of them, as opposed to just Google, or just Google and Yahoo, resulting in more competition for the top spots, increasing the CPC.
- Scenario #2 - Only The Strong Survive. Microsoft will dissolve Yahoo and take over Yahoo Travel and Yahoo Finance, as well as Del.icio.us.com, a Yahoo social booking site, and Flickr.com, the world’s most popular online photo blog. However, if MSN does break Yahoo apart, they had better bring a very smart and creative suite of products to the Yahoo loyalists. This is the scariest scenario because we might be left with only Google and MSN as major search engine providers. As it stands, Google controls about 70% of the search engine market, with its closest competitor being Yahoo. If Microsoft dissolves Yahoo, how much more market share will Google stand to gain? A move like this could upset many Yahoo disciples, and create negative feelings toward MSN, thus strengthening Google’s power. If this should happen, I see Google getting stronger overtime, prompting advertisers to rely on one major search engine for marketing.
- Scenario #3 - The Yahoo Empire Strikes Back?!?! They way I see it, the best scenario for search marketing will be if Yahoo does not sell to Microsoft, but instead makes a huge investment into the products and services they currently offer. They will never compete with Google as a search engine, but they need to get back to what they do best…being a top-notch online media company offering a host of cool services and tools.
I am sure that some of you have differing opinions. Please feel free to further the discussion.
