Steve Balmer is widely recognized as the insane CEO who repeatedly chanted: “Developers, developers, developers, developers.” This mantra would bode well for Yahoo, and a Micro-Hoo base company. I have been doing online marketing and advertising for nearly 10 years, and it seems like Yahoo just doesn’t spend time developing their advertising platform. It appears that they spend time managing it, but not improving or advancing their advertising platform. Shame on you Yahoo, you let Google get the best of you. I’m not sure why, but I have some guesses.For nearly a decade Yahoo inflated their earnings by charging a minimum of 10 cents a click. It wasn’t till recently did Yahoo finally change this policy, but from reports from other online marketing blogs; little seems to have changed. A lot of talk, but no action Yahoo - typical Yahoo.

Yahoo is like a spoiled little boy that loses interest in his toys, only wanting new ones to satisfy his ego. Purchases like Right Media, Blue Lithium, etc… have cost billions, and will take a decade or more to recoup those investments. It would have made more sense for Yahoo to develop their content network, instead of letting just a handful of employees take years to finally bring it out of beta (ooops, is it still in beta?) Why the 10 cents minimum cost for advertisers still on the network? Why not unleash the gates of publishing and allow more publishers into the network? Quality control? I think not. Lack of employee empowerment, I think so.

Yahoo spends more time thinking about what it’s going to do next, then doing anything at all. For over 3 months Microsoft and Yahoo have been going back and forth about a price tag. Yahoo wants more money so senior execs and large shareholders can make as much as possible. Microsoft isn’t stupid, their not going to pay through the teeth and screw themselves over in the process. Yahoo executives are busy spending their time saving their jobs and their asses; not improving their search technology or advertising platform.

Yahoo has fleeced advertisers for years, delivering shitty, overpriced results that generally result in negative ROI’s for their advertisers. Super affiliates/marketers took the Yahoo publishing network for millions of dollars. Just look at the impressive checks these wise-asses post on their blogs. How were they doing it? They were web masters of online arcade websites and blended YPN (Yahoo Publisher Network) advertisements into their website. The YPN control panel allowed publishers to choose what niche their advertisements were. So why not display realestate development or legal advertisements? They were blended so well, that users of these websites had no idea what they were clicking. Sort of the bizzaro world of “banner blindness”

Yahoo needs to stop fucking around and immediately take action to improve business performance and return shareholder value. Getting rid of Terry Semel was the first step. The second step is to focus on your core competencies. If Microsoft is going to aggressively pursue a purchase of Yahoo by buying up shares on the open market, so be it; and it might cost Microsoft even more then $31-$33 a share. Stop buying display advertising networks. There are only so many publishers, and they already work with all the majors. Start-up display advertising networks are being overvalued. Now that Yahoo has the components to compete with Google; start competing with them! Don’t let your platform continue to languish, COPY GOOGLE ADWORDS. Sorry to say it Yahoo, but there is no shame in copying Google Adwords.

Google Adwords is integrating the entire advertising agency in one simple platform. After just a week of using Google Adwords nearly anyone can figure out how to use it. Empower your users Yahoo! Why cause first time advertisers frustration by requiring them to have certain spend limits before upgrading their upload capabilities? I quote Steve Balmer again Yahoo, “Developers, developers, developers, developers!”

I was amazed at the incredible number of worthless tools to be found at Microsoft’s Ad Center Labs - there wasn’t one useful tool that a PPC marketer could use (please comment if you beg to differ).  Clearly Microsoft doesn’t get search engine marketing; hence the Yahoo purchase.  However, if Yahoo gets gobbled up by Microsoft doesn’t that mean they will be destroying one already deficient product, eating it, and pooping out an even more deformed product.  Sorry for the human digestive analogy; another good analogy I heard on TheStreet.com: “Microsoft buying Yahoo is like taking two people in a race that are weak runners and tying their legs together.  They still aren’t going to beat the third runner, because the third runner is faster and stronger.”  Check out the screen shots below for Microsoft’s Ad Center “labs”.  If you can find anything that is valuable to an online marketer, please let me know.

I find it pathetic that Google is attempting to block the Microsoft Yahoo! deal.  In a short and sweet little blog post, David Drummond (Google SVP and legal council) claims that Microsoft is evil and trying to squash Internet openness and innovation.  Pretty sickening that Google is attempting to stop Microsoft through an anti-trust argument.  This is business - and I don’t think Washington should be involved in this matter or any monopoly related issues for that matter.  Free market and consumer choice will always win out in a free economy such as ours - but this is obviously not a free market economy.  Politics, law, power, and persuasion are influencing this massive tech buy by Microsoft.  Microsoft’s business decision is not EVIL (Don’t Be Evil? - right Google?) it is a business decision that was made to increase shareholder value for Microsoft investors.  This is not a moral or ethical question.  The Microsoft Yahoo! deal will give internet users more options, more technology, and an alternative to Google.  Is choice and freedom so wrong Google?

As predicted here on this blog - Yahoo is getting bought by Microsoft (booyah kasha!) Keep in mind that the man structuring this deal appears in the video above. In interviews I’ve read online with Steve Balmer I think it’s clear he doesn’t understand the online market and how to profit from it. Microsoft’s facebook purchase clearly demonstrates their lack of understanding. Google just announced yesterday that paying for ad inventory on social networks was hurting their bottom line - and users on Facebook are even more fickle about clicking ads than they are on MySpace.The Yahoo acquisition for Microsoft will ensure a solid future for both companies during the next 10 years. The synergies to both companies should certainly help create more shareholder value than if the companies stayed apart, did some type of merger, or commercial venture together. Yahoo is the only remaining competitor to Google and this purchase verifies that. So what can we expect from a MicrosoftYahoo! in the second half of 2008 when the deal closes:

• One of the largest display advertising companies in the world
• Launching of mobile software to compete with Google’s Android
• Microsoft Search (Windows Live or MSN) and Yahoo Search merging.
• Windows Vista updates featuring Yahoo search
• More consolidation in internet video (the next logical step is to compete with YouTube)
• Enhancements for publishers looking to make money from contextual advertising
• Google continues to eat away at MicrosoftYahoo! unless MicrosoftYahoo! begins to reshape iself and act more like Google.

Please leave your comments and let Banner Blindness readers know what you think a MicrosoftYahoo! will bring in the second half of 2008.

I haven’t visited AOL.com in quite sometime (probably since I was 12 years old and using dial up) - so I was rather amazed to see that AOL looks identical to Yahoo:

Pretty pathetic AOL-Time Warner - you rip off the design of Yahoo (isn’t this copyright or Trademark infringement?) Regardless, I briefly looked over the monetization strategies of these home pages, and AOL hands down beats Yahoo. So who is more pathetic, AOL that rips of the design, or Yahoo who doesn’t know how to monetize? For example, under the main 300×250 banner ad on AOL there are “featured offers” and under the strange sized banner ad on Yahoo (isn’t it time to switch this to a standard 300×250 Yahoo?) is an offer to download Yahoo messenger. AOL doesn’t waste this space, but puts their AIM download link in the upper left portion of their page.  Additionally, AOL goes further below the fold and offers more content, but Yahoo has My Yahoo (which is possible the worst RSS reader out there), so once again AOL beats out Yahoo.

Yahoo, don’t worry we won’t pick on you too long - Google’s stock just dropped after announcing disappointing earnings. Oh wait, Google increased revenue 51% and Yahoo managed to decrease revenue by 24%; additionally Yahoo is laying off 1000 employees (while Google is hiring 1000 more) and making 2008 an “investment year”. Yahoo, please contact Banner Blindness if you need help growing a pair of balls so you can make 2008 a year of incredible growth and competitive elimination. Yahoo is clearly not getting it - they did make one positive move today: Terry Semel finally leaves Yahoo (he is proud of his accomplishments - hahaha, you ruined this company you Hollywood moron).

Yahoo reported lower then expected earnings Tuesday evening, and announced a soft 2008, sending the stock down over 10% after-hours. CEO Jerry Yang is upbeat but not till 2009 - how weak is that? I prefer CEO’s that makes bold forward looking statements that might not necessarily be true (at least when I’m the shareholder and looking to unload). At a market cap of around 20 billion dollars, Yahoo is looking very very cheap and should seriously be considered a take over target by numerous corporations and private equity funds. I might consider buying it myself ;)  Online advertising continues to grow 20% a year and Yahoo is strongly positioned to profit from this expanding market place. In 2007 Yahoo acquired numerous display advertising networks in order to compete against Google’s acquisition of Double Click. The remaining display advertising networks left on the block are: 24/7 Real Media, SpecificMedia, ValueClick, and Yahoo. At 20 billion dollars I would even contend that Google should consider making an offer to purchase Yahoo. Purchasing Yahoo would position Google as the undisputed master of the Internet, the only sector Google wouldn’t own is online auctions (eBay) - and who would want to own it, as consumers online are demanding quicker and quicker purchase times (auctions are just too slow and still too risky).

So the real question for stock holders is when Yahoo or another entity will announce that they are in talks to purchase Yahoo. Microsoft’s online marketing unit lost a few hundred million last year, and I don’t see them turning that around anytime soon. Microsoft can continue to make money losing investments in display advertising, but will never stand a chance in paid search. Paid search (and all online advertising for that matter) is a numbers game and MSN just doesn’t get traffic - therefore Microsoft will never make money through it. If Microsoft ever wants to compete with Google they will have to pay to get there (and thats exactly what they are doing). I would contend that the most likely suitor for Yahoo is Microsoft (and Microsoft’s only chance of online survival is to purchase Yahoo), and at these levels Yahoo looks Yummy!