Is it me or is everyone else stupid?

So Microsoft have once again come in for Yahoo for $44.6bn. In 2006 they made what, by all accounts, was a similar offer. At that time the Yahoo stock was trading much higher than of recent weeks and therefore a “not so great” deal for Yahoo’s shareholders. It was then a private takeover bid and simply the responsibility of the Yahoo board to say either ye or no. This time around though its different. Yahoo stock is (was) at a unprecedented low and so for Microsoft to come back in and publically announce their offer (no doubt to leverage the Yahoo stock holders into unilateral acceptance) I don’t see how the deal this time around can be declined.

For the no2 and no3 in any industry to merge obviously draws the gaze of the interested regulatory bodies that govern competition and, for Microsoft, there is already bad blood between them and the EU commission. The US federal commission will probably be an easier hurdle for them to overcome but, leaving aside search marketing for a moment, the biggest possible problem for the proposed deal is in the fact that, between Microsoft and Yahoo, they are no1 and no2 in the instant messenger/webmail market and so this could be the greatest possible threat.

A deal of this size will clearly take some time and I dont think it will be an easy ride. A ride though I think it will be and one that will end in the two internet giants merging. Whether they brand as Yahoo, as Microsoft, as [insert new made up web 2.0 name here],  remain as their respective names, microhoo, yahoosoft or whatever – the deal in principal works for both companies, provided the time it takes to happen and the respective “eye off the ball” distraction that legal wranglings bring doesn’t give Google the opportunity to sail off into the distance.

Lets say it happens and happens within a reasonable time period, how does this help us?

Ok, first and foremost and as Ive been posting recently, Google have recently been playing hardball in the domaining arena. They have been banning domainers, domains, closing the AFD application process, killing sub-sub syndication deals (most notably ASK – which Ive now had confirmed from the horses mouth), reducing revenue shares for partners and not appointing a new head of their domain channel. All of which points to them not believing the domain channel is something thats for them in the future. The reason for their apathy is open to debate, though one doubtless reason is because they have the monopoly in sponsored search. Us domainers (who still have the “fraud” tag in the global search marketing community) are therefore quietly being told to put up or shut up by Google.  Ok, so in comes a new and viable option for advertisers. All of a sudden the balance of power shifts (albeit slightly) back towards those that own the traffic and Google will once again have to fight for the advertising revenue and for good partners. Perhaps even sharing more of the revenue? [Sorry, what am i thinking....] This will only happen if Microhoo are committed to the fight. I believe they are, for there’s no doubt that the main reason for the takeover is because with Yahoo they can aggressively vie for the advertiser dollars and take on the mighty G. And don’t forget, Microsoft has the war chest of cash standing by to promote this. As an advertiser myself, a single Microhoo advertising platform would draw me back in and, if my dollars convert, i’ll stay. I’m sure this will be the case for a lot of advertisers.

Im now gonna make a few crazy assumptions. Microhoo happens, they win back advertisers and they remain customers, the platform is clean and un-clunky, Microsoft launch their powerful and established office software as new web based products and all in all Microhoo starts to looks a new and funky alternative. Microhoo then need distribution. Google parking partners are solicited to migrate with decent revenue shares and things for Microhoo partners begin to look rosy.

What does Google do then? More importantly, what do Google do now? They don’t know that my assumption above is not a vision of things to come. No doubt they dont read this blog but theres also no doubt that they haven’t expected this deal to raise its head again at some point. Ok, so Google have summoned their emergency Microhoo contingency committee to arms and to work out the “what if” scenarios. If it were me, Id instruct all of the partner relationship divisions within Google to begin taking it easy with their partners and call off the hounds. I wouldn’t bet on the fact that this may see in the very least a lull in the “lets hammer the domainers” modus operandi currently being practised at Google. Longer term I’m sure Google wont go breaking any parking relationships until they see exactly whats gonna happen with Microhoo..

Time will tell…