More Progress Being Made
For those who have been keeping track, it has been a longer than we originally hoped to get the author review process in place to remove the nofollow from your links (Read about the nofollow and other changes here). Thanks in part due to a call from a distressed author, we got the programmer kicked [...]
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Microsoft Withdraws Yahoo Offer; Yahoo Responds

Microhoo bid raised aloft; Google-Yahoo Kool-Aid quaffed. “No Mas” cried Ballmer’s Microsoft.
Yahoo drank the Google paid search Kool-Aid to fight off Microsoft, leading the Redmond giant to retract its higher bid to acquire the Sunnyvale search engine. Microsoft reportedly offered $33 a share, and Yahoo held fast at $37 a share. That was too rich for Steve Ballmer’s blood. The prospect of Yahoo outsourcing its paid search to Google was also too much for Ballmer to stomach.
So Microsoft walked. In a letter to Jerry Yang (full text below), Steve Ballmer cited Yahoo’s intention to outsource search as the primary reason he decided to scotch the deal.
Of course that doesn’t mean enraged Yahoo! shareholders won’t sue Yahoo.
Ballmer wrote, “I hereby formally withdraw Microsoft’s proposal to acquire Yahoo!.”
Here’s why, according to Microsoft’s business logic:
Advertisers would use Google rather than Yahoo! Panama to manage paid search, fragmenting not only PPC but display advertising and the Yahoo! advertising ecosystem.
Yahoo then wouldn’t be able to retain talented engineers working on advertising systems – engineers whom Ballmer considers a key aspect of Yahoo’s attractiveness.
The decision would also create a morass of regulatory and legal problems that no acquirer – especially Microsoft – would want to slog through. Ballmer believes search market share of the combined Yahooo-Google deal would reduce competition and advertiser choice.
Ballmer took the argument one step further, stating the deal would “effectively enable Google to set the prices for key search terms on both their and (Yahoo!) search platforms and, in the process, raise prices charged to advertisers on Yahoo.
While it would be hard to prove a keyword-auction would enable Google or any search engine to “set prices,” the deal would increase keyword prices based on Google’s ability to monetize inventory more efficiently.
Yahoo responded by promising (again) to maximize shareholder value and pursue strategic opportunities. Yahoo still maintains Microsoft undervalued the company.
Yahoo! banged the drum (again) about:
“– a refined strategic focus to drive enhanced volume and yield;
– reorganized to focus its efforts on its most promising products and services;
– invested in innovations designed to revolutionize display advertising and facilitate closing the competitive gap in search; and
– enhanced expense and resource management to support improved profitability.”
As Jerry Seinfeld might have said, “Yadda, Yadda, Yadda, Yahoo.”
Be prepared Monday for Yahoo shares to plummet back to earth. (Full text of Steve Ballmer’s statement after the jump.)
Click to read the rest of this post…
Q1 2008 Click Fraud Down from Last Quarter, Up from Last Year
Click Forensics has released data showing a decline in click fraud rates in the first quarter of 2008. The overall industry number came in at 16.3%, which is down 16.6% quarter-over-quarter but up 14.8% year-over-year.
Search engine content networks saw a higher average click fraud rate at 27.8%, which is down 28.3% from last quarter but, again, up from last year by 21.9%.
Botnet click fraud traffic was up 8% year-over-year.
Search engines are addressing the click fraud problem head on. Yahoo recently announced the provision of Click Filter Reports, which show advertisers the number of discarded clicks in their PPC campaign. The Sunnyvale search engine also announced a partnership with Click Forensics to address their click fraud woes. Lycos has announced a similar deal with Click Forensics.
Microsoft Earnings Key Takeaways: Where’s the Search?

The biggest acquisition news yesterday wasn’t Microsoft-Yahoo but Arby’s-Wendy’s. In both cases, search marketers are asking, “Where’s the beef?”
Better yet, analysts on the Microsoft conference call should have asked, “Where’s the search?”
Microsoft search queries and page views are up year-over-year. By how much? No Wall St. analysts asked the question.
Microsoft reported $4.4 billion in net income for the quarter.
Microsoft’s online services business increased revenue 40 percent to $843 million, including $143 million from aQuantive, which added 96 new publishers this quarter to the Atlas Publisher Solutions, the ad management platform that competes with Google’s DoubleClick division.
Online advertising for Microsoft grew 39 percent. If aQuantive ad revenue ($47 million) is excluded, Microsoft was up 29 percent. Microsoft’s online audience is still growing. Live IDs increased to 18 percent to 448 million.
Microsoft remains focused on the online advertising market (doubling by 2010 to $80 billion).
Yahoo would accelerate growth but the core strategy won’t change: drive innovation and search, increase value to advertisers and publishers through innovation and scale and grow user engagement across MSN and Windows Live properties.
The weak U.S. dollar may be Microsoft’s best friend. While about half of Google’s revenue comes from the U.S., two-thirds of Microsoft’s revenue is derived from users abroad. In addition, about 15 percent of revenue is in high-growth emerging markets.
Microsoft’s strategy of reinvesting existing business, pursuing organic and acquisition growth opportunities makes the company a formidable competitor with or without Yahoo – except in search.
Twitter Updates for 2008-02-07
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