- Impact
- 47
First, lets look at the big 3 and the market capitalization of each company:
Google, Inc.
Market Cap: 164.38B
Microsoft Corp.
Market Cap: 284.51B
Yahoo, Inc.
Market Cap: 37.90B
Keep in mind that Yahoo stock is up 47% since this morning due to the announcement, thus the previous market cap was obviously significantly lower.
Microsoft and Yahoo! have a big problem. Online ads are booming, and they are getting left out. Microsoft's online business racked up a loss of $248 million during the quarter ending in December. Yahoo! makes money, but its earnings are slipping fast: Net income fell 23 % to $205.7 million last quarter from $268 million during the year-ago period. So why would Microsoft pay such a high price for Yahoo?
Its OBVIOUS if you know where to look.
Yahoo Earnings (2007)
6.97B
Google Earnings (2006)
10.6B (around 12B for 2007)
Here comes the kicker you've been waiting for. Yahoo lost its spot to Google because it became comfortable with being a leader. This is similar to the way HP-Compaq lost market share to Dell and then regained it. If you look at Google, the aura of invincibility has been cracked in the last few months, as shares are down 31% from the 52-week high of $747.24, reached on Nov. 7, 2007.
Yahoo can only go up. It has great earnings but makes very little money because the company has been trying to catch up with Google. Once the creative talent of Microsoft and Yahoo come together, there will likely be thousands of additional layoffs. However, Microsoft is extremely good at cutting costs to reshape the dynamics of its various divisions.
Enter aQuantive.
If all goes as planned, after closing a deal with Yahoo, Microsoft will now have a network that rivals that of Google. Firstly, Microsoft purchased aQuantive, a well developed, high end network. Yahoo purchased RightMedia, laying the groundworks for the underdeveloped Yahoo Publisher Network. You may be asking where this comes into play. Remember Facebook? Microsoft is the premier ad delivery system for Facebook. Under current projections, Facebook will be bigger than MySpace in the next 12 to 18 months.
If it hasn't become clear, Google has been edged into a corner by its own success. While Google has been snapping up companies (Feedburner, Picasa, DoubleClick), Microsoft has been building an advertising juggernaut. Search isn't the reason behind the acquisition, ads are.
The Battle of the Messengers.
Combining YIM and MSN Messenger, Microsoft will now have the largest undisputed instant messaging network in terms of active users. I say active users because AOL/ICQ is larger by far, but mostly abandoned. Personally, it make take years to bring Google down from #1 in search, but looking at the overall picture, things are definitely heating up.
Google reported total 2007 profits of 4.2 billion dollars.
Checkmate.
Google, Inc.
Market Cap: 164.38B
Microsoft Corp.
Market Cap: 284.51B
Yahoo, Inc.
Market Cap: 37.90B
Keep in mind that Yahoo stock is up 47% since this morning due to the announcement, thus the previous market cap was obviously significantly lower.
Microsoft and Yahoo! have a big problem. Online ads are booming, and they are getting left out. Microsoft's online business racked up a loss of $248 million during the quarter ending in December. Yahoo! makes money, but its earnings are slipping fast: Net income fell 23 % to $205.7 million last quarter from $268 million during the year-ago period. So why would Microsoft pay such a high price for Yahoo?
Its OBVIOUS if you know where to look.
Yahoo Earnings (2007)
6.97B
Google Earnings (2006)
10.6B (around 12B for 2007)
Here comes the kicker you've been waiting for. Yahoo lost its spot to Google because it became comfortable with being a leader. This is similar to the way HP-Compaq lost market share to Dell and then regained it. If you look at Google, the aura of invincibility has been cracked in the last few months, as shares are down 31% from the 52-week high of $747.24, reached on Nov. 7, 2007.
Yahoo can only go up. It has great earnings but makes very little money because the company has been trying to catch up with Google. Once the creative talent of Microsoft and Yahoo come together, there will likely be thousands of additional layoffs. However, Microsoft is extremely good at cutting costs to reshape the dynamics of its various divisions.
Enter aQuantive.
If all goes as planned, after closing a deal with Yahoo, Microsoft will now have a network that rivals that of Google. Firstly, Microsoft purchased aQuantive, a well developed, high end network. Yahoo purchased RightMedia, laying the groundworks for the underdeveloped Yahoo Publisher Network. You may be asking where this comes into play. Remember Facebook? Microsoft is the premier ad delivery system for Facebook. Under current projections, Facebook will be bigger than MySpace in the next 12 to 18 months.
If it hasn't become clear, Google has been edged into a corner by its own success. While Google has been snapping up companies (Feedburner, Picasa, DoubleClick), Microsoft has been building an advertising juggernaut. Search isn't the reason behind the acquisition, ads are.
The Battle of the Messengers.
Combining YIM and MSN Messenger, Microsoft will now have the largest undisputed instant messaging network in terms of active users. I say active users because AOL/ICQ is larger by far, but mostly abandoned. Personally, it make take years to bring Google down from #1 in search, but looking at the overall picture, things are definitely heating up.
Google reported total 2007 profits of 4.2 billion dollars.
Checkmate.
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