- Credits
- 54,437
So what's in it for Bartz? For starters, Yahoo will slice $200 million in technology development costs, while continuing to bring in or even grow its search ad revenue. That's because its salespeople will sell not only ads running on Yahoo sites, but also on Bing. Once it's fully implemented, about two years after regulators sign off, the deal is expected to add an annual $500 million in operating income for Yahoo. The recently appointed CEO also buys time to hone Yahoo's strategy and improve other moneymakers, such as placing banner-style display ads that appear on Yahoo's highly trafficked portal and e-mail pages. And by continuing to sell search ads, she maintains relationships with key advertisers rather than let Microsoft walk away with them. "Yahoo doesn't want to look like they've sold off their crown jewel for short-term gain," Sullivan says. "This creates the illusion that they have more control of the situation than they probably do."
It's an illusion that will likely work with Yahoo's long-suffering shareholders. Indeed, the deal will probably be welcomed by investors in both companies, since it lets each play to its respective strengths. Yahoo is most successful as a media company—and that includes selling advertising.
Microsoft, on the other hand, is a technology powerhouse, with vast software development capabilities and the cash to build the billion-dollar data centers needed to run search engines and ad platforms. The roles represent a stark reversal from half a decade ago, when Microsoft used both Yahoo's search technology and its search-ad system. "It's good for both of the companies," says Sandeep Aggarwal, an analyst with Collins Stewart.
source
take that google!
It's an illusion that will likely work with Yahoo's long-suffering shareholders. Indeed, the deal will probably be welcomed by investors in both companies, since it lets each play to its respective strengths. Yahoo is most successful as a media company—and that includes selling advertising.
Microsoft, on the other hand, is a technology powerhouse, with vast software development capabilities and the cash to build the billion-dollar data centers needed to run search engines and ad platforms. The roles represent a stark reversal from half a decade ago, when Microsoft used both Yahoo's search technology and its search-ad system. "It's good for both of the companies," says Sandeep Aggarwal, an analyst with Collins Stewart.
source
take that google!
