Bigmouthmedia search engine news: MSN

Microsoft approaches Facebook in wake of Yahoo disaster

Sat, 05 Jul 2008 12:00:00 GMT

It's now common knowledge that Microsoft has withdrawn its 3-month-old bid for Yahoo Inc, after failing to reach an acceptable price agreement. Microsoft Chief Executive Steve Ballmer had offered to pay $33 per share, or $47.5 billion, for Yahoo, up from an initial bid valued at $44.6 billion, or $31 per share. Yahoo's board wanted $37 per share - a price that the company's stock hasn't reached in more than two years.

Microsoft trails Google and Yahoo in the US $41-billion market for online search and internet advertising - and the bid for Yahoo was clearly an attempt to turn things around. Buying Yahoo would have more than tripled Microsoft's share of searches and stepped up competition with Google, which has grown faster than Microsoft in every quarter since Google's 2004 initial public offering. Microsoft, on the other hand, posted a US $228-million loss last quarter.

The software maker now needs to prove that it can innovate without Yahoo as a partner. But 'without Yahoo' doesn't necessarily mean without anybody. Bill Gates has expressed Microsoft's intentions to make 'advances' in its own search offering and to expand through 'strategic transactions' - and it seems he's quick to act on his word.

Just a few days after walking away from its Yahoo bid, Microsoft has already reportedly set its eyes on Facebook - the second-largest social network behind MySpace. Microsoft CEO Steve Ballmer has mentioned that Facebook would give the company some Web scale. Moreover, Microsoft already owns a 1.6 percent stake - worth $240 million - in the social networking site. According to the Wall Street Journal, Microsoft's bankers have contacted Facebook to see if Mark Zuckerberg and company would be interested in selling the company. There are apparently no active discussions regarding the issue as of yet.

Microsoft's investment always implied an eventual Facebook valuation; but is it a mere coincidence that the proposition has arrived just a few days removed from the Yahoo debacle? Perhaps the folks at Microsoft are looking to turn up the heat on Jerry Yang and his investors at Yahoo, should Microsoft decide to put forth another proposition. Or maybe it's simply an effort on Microsoft's part to save face after having $47.5 billion turned away. Microsoft may even just be looking to acquire some hot Web 2.0 names, in which case the likes of Digg or LinkedIn might satisfy their appetite. Whatever the reason, one thing is certain - Microsoft currently holds a significant want for scale and a whole lot of capital to get it. Will Facebook take the bait?

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The continuing evolution of web analytics

Fri, 09 May 2008 12:00:00 GMT

Web Analytics has been around since the first script was written to present raw log data from servers (logfiles) in a more accessible and readable way. This allowed webmasters to collect, analyse and report information about the users of their websites. Soon after, counters became popular on all sorts of sites desperate to show off their popularity but often showing their lack of it.

Snappily named internet company WebSideStory started out providing counters to porn sites. Every time the counter was downloaded, it increased in number, showing how many people had visited that page. This idea was developed and a small, 1 pixel gif image with a piece of Javascript could be added to the page, allowing WebSideStory to extract loads of data remotely and process it into something more manageable for their customers. Adding Javascript to a page is still used to collect analytics data although there are now various other methods and combinations of methods.

The two main methods of collecting data, logfile analysis and page tagging, both have their faults and if not managed correctly can lead to inaccuracies in the data. The effort and cost involved in setting up and running data collecting systems is generally a factor in choosing the most suitable system. Debate was fierce in the late nineties about which method was best and the deciding factor in that battle was economics.

WebTrends became the sexy web analytic package of 1995 by taking information from logfiles and using pretty graphs and charts to display the information in a more business friendly way. It was an idea copied by many, and by the year 2000 web analytics had become a major industry. Three main players, all of whom used web logs, looked like dominating the market for the foreseeable future; WebTrends, Accrue and NetGenesis. Companies using page tagging, such as WebSideStory and Coremetrics, looked resigned to serving the lower end of the market.

Then something unexpected happened. In 2001, recession hit. The market for web analytics decreased and bigger companies such as NetGenesis and Accrue were hardest hit. CEO's couldn't see the value in spending large amounts of money on expensive web analytics packages and many smaller companies either went out of business or were bought up by other companies. The companies who generally fared best were ones providing analytics using page tagging. Firms who were cutting back due to the recession were happier paying an ongoing fee than a large one-off for their software.

By 2005 the main players in the market had become Coremetrics, Omniture, Webtrends and WebSideStory. Then in 2005 Google entered the maturing market and shook it up, big time. Google purchased web analytics company Urchin and shortly after, released Google Analytics as a free service. The software was not without its faults but it brought web analytics to many companies who could not previously afford them or simply didn't want to pay. It is not as powerful as many alternatives but it is easy to use, intuitive and most importantly, free. The lack of certain functions mean it may not be suitable for top-end websites but it has been immensely popular from the most basic websites to the sites of blue chip companies.

In 2006, Microsoft entered the market with Microsoft Gatineau after buying DeepMetrix Corporation. This product has been criticised for its $5 sign up fee and is still in beta status. It has not really made any big waves in the market, yet.

In 2006 WebSideStory merged with Visual Sciences and was purchased in 2007 by Omniture, leaving only three major analytics forces plus Google and Microsoft in the mix.

So what does the future hold? Big news in the world of analytics recently has been Yahoo's entry into the marketplace with their purchase of IndexTools.

Yahoo have announced that IndexTools will, like Google Analytics, be available at no cost. The big difference between the two services being that IndexTools is a more complex platform with functionality usually found on more expensive tools such as Omniture and WebTrends. Can these products really compete with IndexTools using their current business model?

It is possible that in these reportedly lean economic times, history could repeat itself with companies deserting Omniture, WebTrends and the rest in favour of something similar but cheaper. In fact, something free.

The reaction from Google and the other big companies will be interesting to witness. Google has continually added functionality to GA in the last few years and it's possible we'll see big upgrades sometime in the future to compete with IndexTools.

The possible future takeover of Yahoo by Microsoft will obviously play a large part in Microsoft's future strategy in this area too. It's difficult to imagine Microsoft not getting involved in a big way, either through their Gatineau project or taking over Yahoo.

One thing is for certain, the analytics landscape is continually evolving and it looks like the big boys are taking over. It's going to be very difficult for companies to survive by charging the amounts they currently do without finding something extra to give their clients. With Google, Yahoo and Microsoft all providing their analytics packages at no cost ot the user, it could be a rough ride ahead for some companies if the economy continues to slow down.

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Microsoft's failed takeover bid for Yahoo!: trends and implications

Thu, 08 May 2008 12:00:00 GMT

If you have an internet connection and spend any time at all browsing the headlines, then you must have heard about Microsoft's plan to buyout Yahoo!. When the news first got out in early February 2008, it shook the very foundations of the Search world.

Yahoo! was one of the first search engines to pioneer and dominate the search market following its incorporation on March 1, 1995 - before which Yahoo! was essentially a couple of guys who wanted to keep track of their interests online.

The reasons for Microsoft's intended buyout were obvious: eliminate the competition and expand in order to effectively compete in the search market - and with $44 billion on the table, popular search engine Yahoo! seemed like a logical choice, especially with Google breathing down the necks of both parties.

Microsoft's offer had many implications, both internal - in the shape of products and services offered - and external. in terms of market trends and stock prices. When the news of the bid was first released, following the departure of Yahoo!'s former CEO, Terry Semel, Yahoo!'s stock prices went through the roof, with a jump from $19.18 per share to $28.38 in one day.

After this time, the stock started fluctuating wildly in anticipation of Yahoo!'s decision (or lack thereof), and ending with a dive from $28.67 to $24.37 per share.

During this period, Yahoo!'s technical search team was very busy with new gadgets and functionalities, and new products streamed out of Yahoo!'s labs. In recent months there have been many beta releases and functionalities, some very interesting, others predicted to have no more than a short life span.

All Yahoo!'s new functionalities can be found on Yahoo!'s Search Blog. One of the most interesting innovations has been the recent shift towards an open search infrastructure (project code: SearchMonkey), which enables third parties to build and present their own customised search result entries.

Other fascinating developments are the extension of Search Assist to countries other than the US, and the introduction of SearchScan, which looks out for browser exploits, dangerous downloads and unsolicited email within its returned search results.

It seems that Microsoft's offer may have helped Yahoo!'s period of creativity to flourish - by giving them the impetus to show their fighting spirit. Or perhaps Yahoo!'s developments would have been progressing just as efficiently without the deal hanging over their heads - either way, the long-term effect of the failure of the Yahoo!-Microsoft deal on the search pioneer's stock prices will be key to deciding the path it will take in months to come.

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Yahoo! refuses $48 billion takeover bid from Microsoft

Tue, 06 May 2008 12:00:00 GMT

The Guardian reported that takeover talks between Microsoft and Yahoo! ended on Saturday, with Microsoft increasing its offer for the search engine from its initial bid of $42 billion to $48 billion, reflecting a $33 share price. The offer, made at a meeting between senior staff from both camps in Seattle, was intended to create a technological powerhouse capable of taking on Yahoo!'s arch-rival Google.

However, Yahoo! founders Jerry Yang and David Filo were said to want at least $37 a share, or a price of $53 billion, and their refusal to accept the bid effectively ended a three-month pursuit that was intended to reshape competition for e-mail, search and online advertising.

Commenting on the negotiations, Steve Ballmer, chief executive at Microsoft, said: "Despite our best efforts, including raising our bid by roughly $5bn, Yahoo! has not moved toward accepting our offer. After careful consideration, we believe the economics demanded by Yahoo! do not make sense for us."

In a statement, Yang said he was "incredibly proud" of his team's unity since Microsoft's approach: "With the distraction of Microsoft's unsolicited proposal now behind us, we will be able to focus all of our energies on executing the most important transition in our history so that we can maximise our potential to the benefit of our shareholders, employees, partners and users."

Created 13 years ago by Yang and Filo while still students at Stanford University, Yahoo! was the most popular entry point and search engine for online users worldwide in the late 1990s. But in recent years the engine has been overshadowed by Google and frustrated investors with its drifting strategy and failure to carve out a distinctive path for itself. One of the reasons for Yang and Filo's reluctance to enter negotiations with Microsoft is their protectivness of Yahoo!'s distinctive quirky company culture.

Among Microsoft's reasons for declining to offer more money were the expensive severance benefits included in the contracts of key Yahoo! employees to compensate them in the event of a takeover. The software giant was also wary of Yahoo!'s experimentation in outsourcing certain search advertising to Google, believing this undermined Yahoo!'s key Panama technology and could cause an exodus of disillusioned engineers.

Microsoft insiders insisted that the firm's decision to end talks was a formal decision rather than a negotiating ploy, but industry experts maintain that the software company could try again at a lower price at a later stage should Yahoo! fail to revive its faltering performance.

The search engine braced itself for a backlash from its shareholders following its decision, and saw shares drop 20 percent on Monday when markets opened, trading at $23.02 per share, down from Friday's closing price of $28.67. This was still well above the $19 per share that Yahoo! was trading at when Microsoft made its initial offer three months ago, and the stock closed on Monday at $24.37, down 15 percent, not nearly as bad as some analysts expected.

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Yahoo! releases Vista beta of its IM service

Thu, 01 May 2008 12:00:00 GMT

Search engine provider Yahoo! has launched a new version of its instant messenger (IM) service for the Windows Vista system, it has been revealed.

The revamped Yahoo! Messenger - which had been available in a text messaging-only preview version since December last year - has a range of new features, such as scalable contacts, tabbed messenger windows and more skins.

In addition, the offering provides users with support for computer-to-computer calls, as well as calls to and from phones.

It can also communicate with mobile phone text messages sent using SMS technology and has integration with the Yahoo! address book

Although the older IM version did work with Windows Vista, these capabilities were missing.

Available to download now, the new system is still in beta and Yahoo! has said it would appreciate user feedback to assist with making improvements.

Commenting on the new offering, CNET News writer Ina Fried said it has an "extremely pleasant look and feel".

She commented: "Using the Windows Presentation Foundation graphics engine built into Vista, the program smoothly resizes Windows and moves buddy icons around based on the screen real estate available."

Ms Fried added that Yahoo! does not have any immediate plans to offer further Vista applications.

Reportedly, the search engine provider intends to "learn its lessons" with the IM program and wait for the number of users who have installed the Vista system to increase.

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Microsoft 'considering investing $1.5bn in retention of Yahoo! staff'

Wed, 30 Apr 2008 12:00:00 GMT

Internet giant Microsoft is reportedly considering setting aside $1.5 billion in order to retain Yahoo! staff if its takeover of the search engine provider goes ahead.

According to details of a lawsuit filed by shareholders against Yahoo! in February concerning pension funds, Microsoft will use the money if it is successful in its bid for Yahoo!.

During a conference call hearing on March 24th, a Yahoo! lawyer said that Microsoft had "earmarked $1.5 billion for employee retention at Yahoo!", the Wall Street Journal reports.

The legal case concerned allegations that Yahoo! breached its duties by not responding in good faith to Microsoft's acquisition offer.

Initial discussions concerning the $1.5 billion staff retention plan were said to have taken place in a communication between the general counsels of Yahoo! and Microsoft.

A Microsoft spokesman stated: "Microsoft is not commenting on the suit or anything related to it."

Meanwhile, in a staff email sent in February, Kevin Johnson, president of the Microsoft platforms and services division, commented, "There's no question we will dedicate significant rewards and compensation to Yahoo! and Microsoft employees."

In January of this year, Yahoo! revealed it had let go of more than 1,000 workers, reducing the company's total number of personnel to around 13,200.

The reductions were said not to have affected the areas of the business that support its "critical growth initiatives".

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Microsoft 'to unseat current Yahoo! board'

Tue, 29 Apr 2008 12:00:00 GMT

With the deadline for Yahoo! to accept Microsoft's takeover proposal now past, Microsoft may be set to unseat the search engine provider's board, it has been suggested.

According to a report in the Telegraph, the software and internet giant is "understood to be preparing to wage a proxy battle against Yahoo!".

The publication states that the move is "part of [Microsoft's] next step to attempt to wrestle control of the business as it aims to go head-to-head with Google in the lucrative internet search market".

If Microsoft was successful in taking over control of the board, it would use the newly appointed directors to rescind a current Yahoo! clause which prevents an investor from purchasing more than 15 per cent of the firm on the open market - a rule intended to prevent hostile takeovers.

Microsoft has already identified ten directors to replace the current Yahoo! board, the Telegraph reports.

They include Edward Meyer - former head of Grey Global Group - and John Chapple, who used to be chief executive of Nextel Partners.

Last week, Chris Liddell, Microsoft's chief financial officer, stated that the failure of Yahoo! to enter into negotiations would cause Microsoft to examine its alternatives.

He stated: "These alternatives clearly include taking an offer to Yahoo! shareholders or withdrawing our proposal and focusing on other opportunities."

Meanwhile, Scott Kessler, a technology analyst at Standard & Poor's, added that he does not expect Microsoft to walk away from a possible deal.

He commented: "This is something Microsoft has been thinking about and working towards for the better part of two years. Microsoft's the kind of company that says what it does and does what it says," the Guardian reports.

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Yahoo!-Microsoft deal deadline passes

Mon, 28 Apr 2008 12:00:00 GMT

The deadline of April 26th set by Microsoft for Yahoo! to come to an agreement over a possible takeover has passed.

Now, Microsoft must decide whether to walk away from the deal it proposed or whether to pursue a hostile takeover of Yahoo!.

According to the Wall Street Journal (WSJ), the decision currently facing Steve Ballmer, chief executive officer of Microsoft, concerning Yahoo! is "one of the biggest" of his career.

Sources close to the matter told the publication that there had been no direct contact between the two firms over the weekend.

They added that Microsoft was unlikely to take action today (Monday April 28th).

The WSJ goes on to suggest that, after publically announcing that Microsoft will take its case directly to Yahoo!'s shareholders in a letter sent by Mr Ballmer on April 5th, it is unlikely that Microsoft will end its pursuit.

It states: "Abandoning the bid following his public sabre rattling might damage his own credibility as well as Microsoft's."

However, during a conference call with reporters last week, Chris Liddell, Microsoft's chief financial officer, stated that the firm is prepared to withdraw its offer to buy Yahoo! and believes it is capable of achieving success in the online advertising market whether it acquires the search engine provider or not.

Spokespeople for both Microsoft and Yahoo! - which maintains that Microsoft's offer is an undervaluation - declined to comment on the issue.

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Microsoft 'to pursue online ad market with or without Yahoo!'

Fri, 25 Apr 2008 12:00:00 GMT

Internet and software giant Microsoft has revealed that it intends to focus on the online advertising market whether it acquires Yahoo! or not.

During a conference call with reporters concerning the firm's quarterly profits, Chris Liddell, Microsoft's chief financial officer, stated that the firm is prepared to withdraw its offer to buy Yahoo! and believes it is capable of succeeding in the market without the search engine provider.

He commented: "As we said recently to the board, unless there's progress by this weekend, we will reconsider our alternatives."

Mr Liddell added: "With respect to Yahoo!, we have been clear speed is of the essence.

"With or without a Yahoo! combination, Microsoft is focused on the online advertising market."

According to the expert, Microsoft could take the offer to Yahoo!'s shareholders or "withdraw the proposal and focus on inorganic and organic opportunities".

Yahoo! has been set a deadline of tomorrow (Saturday April 26th), by which time Microsoft will expect a formal response to its takeover proposal.

Microsoft posted a fall in profits of 11 per cent in the three months to March 31st, with the figure standing at $4.39 billion.

The news comes shortly after Yahoo! reported an increase in earnings for the first financial quarter, recording a profit of $150 million.

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Yahoo!'s earnings report 'will result in prolonged Microsoft takeover battle'

Thu, 24 Apr 2008 12:00:00 GMT

The positive earnings results posted earlier this week by Yahoo! will not help it fight off Microsoft's takeover bid, but rather will result in a drawn out struggle, it has been suggested.

According to Aleksandra Bosnjak, lead analyst at StrategyEye Digital Media, the search engine provider's first-quarter performance "has probably set the scene for a prolonged battle for Microsoft in its bid to takeover Yahoo!", VNUNet.com reports.

As had been predicted by a number of search industry analysts, Yahoo! revealed that its earnings for the first three months of 2008 had beaten expectations, with net revenue standing at $1.35 billion, slightly ahead of initial estimates of $1.32 billion.

Commenting on the results, Ms Bosnjak said: "By delivering earnings and revenue that surpassed market estimates, Yahoo! added more uncertainty in terms of finding the right acquisition price."

She added that, regardless of its earnings, the internet company is still in a "position of weakness" and will have to collaborate with another company in order to make advances in the market.

The expert stated: "It is in Yahoo!'s interest to resolve this bid as soon as possible since failing to find a solution means, ultimately, no progress."

Additionally, both Yahoo! and Microsoft are under pressure to combat the advances being made by rival company Google, which is ahead in "every single aspect of online competition", she went on to say.

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