Staying current with Microhoo Video

Staying current with Microhoo Video Transcript

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>> I'm Dan Farber coming to you from CNET News studio in San Francisco and I'm joined by my colleague Charlie Cooper and we are here to talk about what else Microsoft and Yahoo.

>> Microsoft all the time.

>> So over the weekend we get a word that what we thought have been a done deal at Microsoft and Yahoo will go into separate ways. Well, not so fast. Steve Ballmer and company are apparently interested in taking another look may be not for the entire company but for some of the assets whatever they may include and then today we hear there's another rumor that once they get done taking a look at Yahoo and perhaps making a bid, then there's facebook. At this rate, I don't know what's next. McDonald's?

>> That's a good point or Burger King something like that. But you know, from my point of view, I think that essentially what Microsoft wants to do is take Google out of the equation and as you know Google and Yahoo had been dancing around trying to do an ad deal around text ads where Google would be selling text ads on Yahoo's search site.

>> Which mean Microsoft worst nightmare.

>> Right and yeah and Ballmer talked about this in a letter to Gerry Yang when he walked away from the table that just wasn't sitting well with them. So I think this is a way for Microsoft to kind of keep the door open and for Yahoo perhaps to save face because they weren't expecting Microsoft to walk away. At 33 dollars, they thought, we'll get them to 37 and may be we can get them to 35. It didn't happen and so I think given all the share holder law suits and Carl Icahn coming in and putting up a new board of directors to the July 3rd shareholder meeting, I think, Yahoo has to be very open to this kind of relationship.

>> The board is under a lot of pressure especially because of what Carl Icahn is doing. Just last week organized this proxy slate. The question that I have is, what are we talking about now? If we're not talking about a full purchase of Yahoo--that may or may not happen. If we're talking about assets, what assets are they really gonna be negotiating over?

>> Well you know I gave this some thought and I posted something today and my impression is, what they're trying to do is again is stop this Google/Yahoo deal on search ads from happening. And then secondly may be announced Microsoft has an event this week called advance-a-weight which is an advertising leadership form so perhaps they want to announce that. That leaves the door open to come back later given what's happening with the shareholder law suits on Carl Icahn, come back later and say you know we still wanna buy the whole company but let's do it under more friendly terms.

>> It's possible but there are so many balls in the air. Again, if Yahoo gets rid of search, what does that leave it with. Flickr and few other properties from Icahn.

>> I totally disagree. I totally disagree. I think you underestimate the fact that Yahoo has 500 million unique users every month. They have not just Flicker but they have all these e-mail users and instant messaging users and I think one of the goals for Microsoft as well as for Yahoo and let me quote from Kevin Johnson who runs Windows and Windows Live he says, "We have four pillars. One is to consolidate the platform and window in display. The next is the innovating disrupt search so that applies to the search things that are gong on with Yahoo. Secondly, is to deliver end-users experiences across the PC, the phone and the web. That's something that Yahoo does as well as to reinvent the portal and social media experiences. Again something that Yahoo is deeply involved in and has a lot of technology and a lot of engineers around. So I think that there are a lot of assets and that by combining, there are much greater threat or competitor to Google.

>> If you're talking an outright purchase of Yahoo, I'm with you, but what's the fastest growing segment of advertising? It's search. If we're talking about covering a part of the company I still don't know, if that makes sense from a Yahoo perspective. Again leaving the door open for something a little bit more [inaudible].

>> I would think it more as a joint venture where those two guys are getting together Yahoo...I mean Google has almost 70 percent share of the search ad market. So if they combine they got 25, 30 percent that's a...may be by combining there'll be a stronger competitor to Google in that space.

>> Perhaps, but then again now we've got Facebook perhaps in the equation. That one at this point I still don't understand. We're talking about Microsoft and really incorporating a lot in a very short amount of time.

>> I don't know how short the time it is. But I would have to say that at this point Facebook is probably rethinking its stance but how independent it wants to say given the fact that it turns out that selling ads on social networking sites is not as lucrative as selling ads on the search site.

>> And the CPMs are not that great.

>> They're not as great and secondly there's the issue of well if the economy is kind of slowing down. If they have more competitors and the wall garden approach I meaning trying to keep people within face book is becoming less of a reality given all the issues around. People wanting to have their data and all the data portability things going on with Google Friend Connect and so on that you know perhaps Facebook at least the elders at Facebook are really thinking well if we can get 20 billion dollars out of Microsoft instead we will take it.

>> Instead of chancing an IPO that may or may not come about.

>> Sure. Sure it makes sense.

>> Okay. For CNET News I'm Charlie Cooper.

>> I'm Dan Farber. Thanks for watching. ^M00:05:23 [ Music ]