Microsoft-Yahoo: looking back at the press conference

Thu 30 July 2009 17:20, Bas van den Beld

There will be few people in the industry who will have missed what happened yesterday. The Microsoft / Yahoo deal probably flouded most search marketers RSS Readers.

Off course we announced the news on Searchcowboys yesterday, but we did more. We joined the press conference and Live twittered about it. In this post we'll look back at the press conference.

Microsoft-Yahoo: looking back at the press conference

One big happy family
Yahoo and Microsoft were represented by their CEO's, which immediately made clear how important the deal is for both companies. What really stood out was the 'familiarity' the companies were trying to spread out to the world. Steve Ballmer was already talking about 'us' and there was a lot of talk about how good the 'team' is. Carol Bartz even expressed this by talking about all the 'bonding' which had been going on over the last couple of months.

How will the 'teams' be working?
Getting two companies to 'merge' isn't easy. It will take a lot of time. Bartz explained a full global transition could take up to two years. But they apparently have already started. There was an interesting moment when Bartz was corrected by Ballmer. She talked about the 'companies merging'. Ballmer stepped in and corrected her: not the companies are merging, just the search is.

The teams will 'doing their own thing' but will consist of people from both sides. There will be Yahoo-employees who will be added to the Bing-search teams. Bartz knows it will be a difficult operation. "Dating is one thing, but having a partnership is another"

Ballmer believes that is the most logical step to take. He didn't go into the way it all will work in the future but decided to cut the discussion by saying "it's not like we come here with a two page term - sheet..."

What does that mean for jobs?
The deal is going to cost some Yahoo-employees their jobs, thats for sure. When asked about this subject Bartz pointed out there were three variables:
1. Yahoo search employees will be taking jobs at Microsoft
2. Yahoo search employees will be asked to help on the display side
3. There will be redundancies.

She stressed to say that the process would take 2,5 years so it would give those people plenty of time to get other jobs...

What makes this deal better than last year?
It was the inevitable question that Bartz had to answer. Last year Microsoft proposed a deal Yahoo couldn't refuse but did. How is this deal better than that one?

Bartz didn't answer the question straight up at first. She started talking about how there was "more fiction in the market than facts" and how an upfront cash deal for Yahoo wasn't interesting because they wanted a deal "that floated well". She also made a remark which sounded like a hint towards Jerry Yang: "Yahoo needed to get focus".

Ballmer stepped in to 'rescue' Bartz and stated that the current revenues of Yahoo are guaranteed by Microsoft and that "the deal is not better, its different than the last deal" which is a political answer.

What will be integrated?
The reason for the deal is simple: to get more scale and become the number two (no, not the number one) player in the world. But not everything will be merged. The deal is search and sales. Both companies can focus on key-areas: Microsoft on Search, Yahoo will go for the sales-part.

When asked why display advertising wasn't part of the deal Bartz replied that they wanted to keep the deal as straightforward as possible.

The Yahoo technology will be integrated with that of Bing, but Bing will be the default search engine. Not in name though. Yahoo search will keep its own name, it will just say "Powered by Bing".

When asked by Danny Sullivan what would happen with other services like delicious and Flickr there was no real answer on that. Bartz said only: "There are still some aspects which are not decided on."

The press conference revealed only a few 'new' things. It seems clear that Microsoft is the 'winner' in this deal. But both parties are trying hard to come across as a new and happy family. But somehow you get the feeling that its kids who were forced to be brother and sister because their parents found new love...


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