Yahoo merger holds peril for small biz
It’s like we’re watching a scene from that dumb reality show, “The Bachelor,” and in this case the bachelor is Yahoo.
Who will walk down the aisle with Yahoo? Microsoft? Google? Time Warner’s AOL? Even News Corp. is getting into the act, considering a plan to team up with Microsoft in its bid for Yahoo.
(Msnbc.com is a joint venture of Microsoft and NBC Universal.)
The Bachelor, aka Yahoo, has a lot of hot, crazy babes to choose from. If you’re a small business that wants to place ads on search engines to get people to click over to your Web site, you just may want to tune in.
Each potential merger scenario could affect the future of your Internet ad dollars.
Most analysts believe Microsoft will prevail in its bid for Yahoo, and while that may seem on the surface to mean higher prices for ads because there will be less competition, think again.
“The risk to advertising rates was increasing as Google approached monopoly power and was less and less concerned with competition," says Rob Enderle with tech advisory firm The Enderle Group. The possibility that some of Google's rivals will team up could mean more effective competition, he says.
“As long as they don’t illegally collude prices are more likely to go down than up as the two battle for customers," Enderle says. But don't look for much change unless and until the dust settles from any merger, which is sure to be complex.
Miki Dzugan, president of Rapport Online Inc., an Internet marketing firm that helps small business owners figure out where their cyber ad dollars should be going, is on the fence about a Yahoo-Microsoft marriage.
“Heaven would be if Microsoft purchased Yahoo, kept Yahoo intact under the Yahoo brand, and used Yahoo search and Yahoo Search Marketing to power Microsoft Live,” she says.
A worse scenario would be if Microsoft merges Yahoo into Microsoft Live, and replaces Yahoo Search Marketing with Microsoft's adCenter, she says. Dzugan considers Yahoo's solution far easier to use for small business owners.
“People hate using Microsoft. They are arrogant and they don’t have very good software, competitively speaking. Using Microsoft adCenter is very slow, and I find I burn up a lot more time managing it than I do Yahoo or Google.”
Right now, she says, Yahoo is a perfect alternative to Google for the little guy.
When small firms use Google, Dzugan says, their small budget has been "promptly gobbled up with nothing to show for it,” she explains.
Yahoo, she adds, has lost so much of its market share to Google that advertising on Yahoo is sometimes a better bet for a small business when they’re starting out because they don’t get lost in the sea of ads.
If Google and Yahoo were to partner, that would probably just mean a bigger Google.
So, tune in next week, for another edition of “The Internet Search Engine Bachelor.”
You never know who else will be showing up on Yahoo’s doorstep with a wilted rose.
