David Utter at WebProNews is reporting on a conference call taking place right now as Microsoft bids to purchase Yahoo! for $44.6 billion. The move is designed to create a more credible competitor to Google and deepen Microsoft's position in the market for online business software, says CNN money.
Microsoft said the booming online advertising market "is increasingly dominated by one player" -- a reference to Google -- and suggested that with Yahoo under its wing it could better compete in the bonanza.
How big is this bonanza they're after? MS forecasts that online advertising sales will double from 40 billion dollars in 2007 to nearly 80 billion in 2010.
Ray Ozzie, Chief Software Architect at MS, says search is important to users. "Social platform will become a new entry point" he noted and called Yahoo pioneers in this field. "We can further accelerate the transformation to a more social web."
This bid comes just two days after Yahoo! announced plans to lay off 1,000 employees as part of an effort to revitalize a company that analysts say has strayed from its profitable strengths.
Microsoft has a lot riding on the Yahoo offer, says Todd Benjamin of CNN.
"It's paying a huge premium to try to play catch-up to Google. Many say the battle has already been lost, Google is too far along. Clearly the premium that Microsoft is willing pay for Yahoo shows they still think there's a lot of potential revenue for them to capture."
This deal is all about the ad dollars. PR people will have to wait and see what it means in terms of organic search and news search.