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Bing will go to the next level after Microsoft Marries Yahoo

SetyaPutra.Org — Thu, 30 Jul 2009 05:14:38 +0000

This year, Yahoo give us a lot of shocking news. After last year Microsoft offer turn down by Yahoo, and 2nd quarter of this year Yahoo announce to close Geocities, and now Microsoft has announced that it has partnered with Yahoo in order to create a stronger no. 2 on the search engine market to go against Google. Through the marriage, after over a year and a half of off-again on-again speculation and failed negotiations, Microsoft and Yahoo have combined their search engine and online advertising businesses in order to close the gap separating both companies from Google. Under the agreement, Microsoft’s Bing search engine will power Yahoo search on all Yahoo sites. At the same time, Yahoo will take on the role of exclusive worldwide relationship sales force for itself and for Microsoft, and will deal directly with both of the companies’ premium search advertisers.

CEO Carol Bartz stated earlier this year that it would take Microsoft boatloads of money to get Yahoo. While there is no money upfront, according to the financial terms of the agreement disclosed, Bartz still managed to get her wish. The Yahoo CEO indicates that the partnership with Microsoft brings to the table “boatloads of value” for Yahoo, for its users, and for the industry. As far as Yahoo is concerned, the company is expecting its annual operating income to get a boost of approximately $500 million. Current estimates reveal that Yahoo expects expenditure savings of about $200 million, with a forecasted $275 million extra to annual operating cash flow.

“Through this agreement with Yahoo!, we will create more innovation in search, better value for advertisers, and real consumer choice in a market currently dominated by a single company,” revealed Steve Ballmer, Microsoft chief executive officer. “Success in search requires both innovation and scale. With our new Bing search platform, we’ve created breakthrough innovation and features. This agreement with Yahoo! will provide the scale we need to deliver even more rapid advances in relevancy and usefulness. Microsoft and Yahoo! know there’s so much more that search could be. This agreement gives us the scale and resources to create the future of search.”

Microsoft and Yahoo promised that the deal was designed to offer an evolved web search experience to benefit not only end users but also advertisers. At the same time, the Redmond company noted that the partnership would ensure sustained innovation to the industry. Neither Microsoft nor Yahoo have made it a secret that they would flex their combined search engine muscles to go against Google.

The Source : – Softpedia

Data from an advertising company : Bing Users Are 55 % More Likely to Click on Ads

SetyaPutra.Org — Sun, 26 Jul 2009 04:41:51 +0000

Microsoft’s new search engine Bing has been a relative success for the company, if not in user numbers, which may have risen slightly in the past month, though sources are often contradictory, then by the large amount of mostly positive press it has been getting almost two months since it was launched. And now there seems to be another reason why Microsoft execs should be patting themselves on the back as data from search-advertising network Chitika shows that Bing users are 55 percent more likely to click on an ad in a site they are visiting, compared to Google users.

“We at Chitika are quite fond of search engines: since all of our ads serve only to search traffic, they’re our bread and butter in the online world. So with Microsoft’s new Bing decision engine making so much noise, we thought we’d take a closer look at the clickthrough rates of visitors from the three major search players: Yahoo!, Google, and Bing,” Dan Ruby, director of marketing at Chitika, said about the reasoning behind the study.

The study looked at ads on 50,000 sites in Chitika’s network, which generated 32 million impressions in a week this month. The findings show that users who landed on the sites coming from a Bing search were more likely to click on an ad, with clickthrough rates of 1.5 percent. Meanwhile, only 1.24 percent of those coming from Yahoo’s search engine clicked on ads on the sites, with Google users coming dead last following on ads only in 0.97 percent of the cases.

While the data is interesting in itself, does it really say anything about the ad market or Bing for that matter? One could assume that the fact that Bing users are more likely to click on ads is a characteristic of the whole group and not just an unrelated coincidence. One could even speculate, like TechCrunch does, that they are using Bing in the first place because they are more susceptible to ads, as Microsoft has been pouring tens of millions in an ad campaign for the search engine. Still it may not have anything to do with the product itself but rather with the fact that it has such a small audience.

The Source : Softpedia.com

Microsoft + Yahoo agains Google ?

SetyaPutra.Org — Tue, 12 Feb 2008 15:26:25 +0000

Beberapa hari terakhir merupakan berita paling mengejutkan di kalangan pengguna internet serta pemerhati TI. Microsoft mengajukan proposal (yang disebut oleh pihak Yahoo sebagai a friendly takeover) untuk membeli Yahoo dan melakukan merger. Kabarnya, microsoft menawarkan $44,6 milyar agar merger ini berhasil. Karuan saja kabar ini menggemparkan pasar saham sehingga saat itu juga saham Yahoo (YHOO) naik 17% sedangkan saham microsoft turun 1,5%. Saham microsoft turun dikarenakan adanya kabar bahwa untuk membeli Yahoo, sebagian biaya merger didapat microsoft dengan cara hutang dulu.

Setelah usahanya mendekati Google gagal beberapa tahun lalu, memang saat yang tepat bila Microsoft mulai mendekati Yahoo. Karena dibandingkan dengan kemampuan Yahoo dan Google, maka Google menang hampir di semua lini bisnis search engine. Apalagi bisnis Yahoo dan Google memiliki banyak kesamaan. Maka bila ingin memenangkan perang bisnis search engine dan turunannya, mau tidak mau Yahoo harus segera membenahi model bisnisnya, dan ini butuh dana segar. Di saat inilah Microsoft muncul.

Bagi yang skeptis terhadap masa depan Yahoo kedepan karena adanya bisnis yang sama di Microsoft seperti milik Yahoo, yaitu MSN, akan mematikan Yahoo secara perlahan. Oleh karena itu jika Yahoo menerima pinangan Microsoft, kemungkinan besar akan ada draft pemisahan bisnis Yahoo-MSN dalam dua perusahaan berbeda. Kalau tidak maka Yahoo yang mati, atau MSN yang mati atau bahkan dua-duanya bisa tidak laku.

Menurut Henry Blodget ada perbedaan strategi yang mendasar antara Microsoft dan Google dalam menggunakan internet sebagai ladang bisnisnya :

Google ingin menggunakan internet sebagai tempat mebangun bisnis supernya dan dalam prosesnya berharap bisa “membunuh” microsoft (memang misi yang sangat ambisius)
Microsoft menggunakan internet untuk melindungi bisnis yang memang sudah besar pada Windows dan Aplikasi Office.

Satu strategi bersifat menyerang dan satunya bersifat bertahan. Meskipun menurut saya, saat ini Microsoft mulai menyerang. Sedangkan Google sejak didirikan terlihat memiliki strategi pasar yang jitu dengan pola serang dan serang. Lihat saja, banyak layanan internet yang sudah “dicaplok” oleh Google, bahkan saat ini kabarnya juga akan mengambil alih DoubleClick. Bisa dibayangkan betapa serunya pertarungan ini.

Yang jelas langkah Microsoft memang tidak main-main. Ini tercermin dari surat Steven A. Ballmer (CEO Microsoft) kepada Yahoo berikut ini :

January 31, 2008

Board of Directors
Yahoo! Inc.
701 First Avenue
Sunnyvale, CA 94089
Attention: Roy Bostock, Chairman
Attention: Jerry Yang, Chief Executive Officer

Dear Members of the Board:

I am writing on behalf of the Board of Directors of Microsoft to make a proposal for a business combination of Microsoft and Yahoo!. Under our proposal, Microsoft would acquire all of the outstanding shares of Yahoo! common stock for per share consideration of $31 based on Microsoft’s closing share price on January 31, 2008, payable in the form of $31 in cash or 0.9509 of a share of Microsoft common stock. Microsoft would provide each Yahoo! shareholder with the ability to choose whether to receive the consideration in cash or Microsoft common stock, subject to pro-ration so that in the aggregate one-half of the Yahoo! common shares will be exchanged for shares of Microsoft common stock and one-half of the Yahoo! common shares will be converted into the right to receive cash. Our proposal is not subject to any financing condition.

Our proposal represents a 62% premium above the closing price of Yahoo! common stock of $19.18 on January 31, 2008. The implied premium for the operating assets of the company clearly is considerably greater when adjusted for the minority, non-controlled assets and cash. By whatever financial measure you use – EBITDA, free cash flow, operating cash flow, net income, or analyst target prices – this proposal represents a compelling value realization event for your shareholders.

We believe that Microsoft common stock represents a very attractive investment opportunity for Yahoo!’s shareholders. Microsoft has generated revenue growth of 15%, earnings growth of 26%, and a return on equity of 35% on average for the last three years. Microsoft’s share price has generated shareholder returns of 8% during the last one year period and 28% during the last three year period, significantly outperforming the S&P 500. It is our view that Microsoft has significant potential upside given the continued solid growth in our core businesses, the recent launch of Windows Vista, and other strategic initiatives.

Microsoft’s consistent belief has been that the combination of Microsoft and Yahoo! clearly represents the best way to deliver maximum value to our respective shareholders, as well as create a more efficient and competitive company that would provide greater value and service to our customers. In late 2006 and early 2007, we jointly explored a broad range of ways in which our two companies might work together. These discussions were based on a vision that the online businesses of Microsoft and Yahoo! should be aligned in some way to create a more effective competitor in the online marketplace. We discussed a number of alternatives ranging from commercial partnerships to a merger proposal, which you rejected. While a commercial partnership may have made sense at one time, Microsoft believes that the only alternative now is the combination of Microsoft and Yahoo! that we are proposing.

In February 2007, I received a letter from your Chairman indicating the view of the Yahoo! Board that “now is not the right time from the perspective of our shareholders to enter into discussions regarding an acquisition transaction.” According to that letter, the principal reason for this view was the Yahoo! Board’s confidence in the “potential upside” if management successfully executed on a reformulated strategy based on certain operational initiatives, such as Project Panama, and a significant organizational realignment. A year has gone by, and the competitive situation has not improved.

While online advertising growth continues, there are significant benefits of scale in advertising platform economics, in capital costs for search index build-out, and in research and development, making this a time of industry consolidation and convergence. Today, the market is increasingly dominated by one player who is consolidating its dominance through acquisition. Together, Microsoft and Yahoo! can offer a credible alternative for consumers, advertisers, and publishers. Synergies of this combination fall into four areas:

Scale economics: This combination enables synergies related to scale economics of the advertising platform where today there is only one competitor at scale. This includes synergies across both search and non-search related advertising that will strengthen the value proposition to both advertisers and publishers. Additionally, the combination allows us to consolidate capital spending.

Expanded R&D capacity: The combined talent of our engineering resources can be focused on R&D priorities such as a single search index and single advertising platform. Together we can unleash new levels of innovation, delivering enhanced user experiences, breakthroughs in search, and new advertising platform capabilities. Many of these breakthroughs are a function of an engineering scale that today neither of our companies has on its own.

Operational efficiencies: Eliminating redundant infrastructure and duplicative operating costs will improve the financial performance of the combined entity.

Emerging user experiences: Our combined ability to focus engineering resources that drive innovation in emerging scenarios such as video, mobile services, online commerce, social media, and social platforms is greatly enhanced.

We would value the opportunity to further discuss with you how to optimize the integration of our respective businesses to create a leading global technology company with exceptional display and search advertising capabilities. You should also be aware that we intend to offer significant retention packages to your engineers, key leaders and employees across all disciplines.

We have dedicated considerable time and resources to an analysis of a potential transaction and are confident that the combination will receive all necessary regulatory approvals. We look forward to discussing this with you, and both our internal legal team and outside counsel are available to meet with your counsel at their earliest convenience.

Our proposal is subject to the negotiation of a definitive merger agreement and our having the opportunity to conduct certain limited and confirmatory due diligence. In addition, because a portion of the aggregate merger consideration would consist of Microsoft common stock, we would provide Yahoo! the opportunity to conduct appropriate limited due diligence with respect to Microsoft. We are prepared to deliver a draft merger agreement to you and begin discussions immediately.

In light of the significance of this proposal to your shareholders and ours, as well as the potential for selective disclosures, our intention is to publicly release the text of this letter tomorrow morning.

Due to the importance of these discussions and the value represented by our proposal, we expect the Yahoo! Board to engage in a full review of our proposal. My leadership team and I would be happy to make ourselves available to meet with you and your Board at your earliest convenience. Depending on the nature of your response, Microsoft reserves the right to pursue all necessary steps to ensure that Yahoo!’s shareholders are provided with the opportunity to realize the value inherent in our proposal.

We believe this proposal represents a unique opportunity to create significant value for Yahoo!’s shareholders and employees, and the combined company will be better positioned to provide an enhanced value proposition to users and advertisers. We hope that you and your Board share our enthusiasm, and we look forward to a prompt and favorable reply.

Sincerely yours,

/s/ Steven A. Ballmer

Steven A. Ballmer

Chief Executive Officer

Microsoft Corporation

Dari berita diatas, apa manfaat yang bisa dipetik ? Hanya satu, bisnis IT memang menggiurkan dan bisa membuat kaya sekaligus miskin jika tidak berhati-hati. (Gak nyambung ya ?? EGP deh!. Oke deh.. kita tunggu saja kalau memang benar nanti Yahoo jadi bergabung dengan Microsoft, apakah bisa menang melawan Google ? Hanya tinggal tunggu waktunya saja untuk melihat who’s the winner of this bussines.