Is Yahoo a fit for Microsoft? Sarah Stottsberry Connie Skomra Phil Laube

Overview Should Microsoft buy Yahoo? Why?  What is the future of computing? What about Yahoo? – what do they bring? MS has what they need already to meet the future

Future of computing Movement from “PC” to small devices – everything is a device Less tapping – interface differently Quantum leap – every aspect  “Habitative computing”

Future of computing What’s at the base?  Information People can’t use information if they can’t find it Search is what brings the information to the consumer

New World of searching Devices searching without prompt (object level search) Information will find the user Highly accurate / more relevant results

Search & advertising: Matches businesses to end users Cost: free Cost: $$ Matching customers to businesses: Priceless

Getting to the future Search Services Information consumer (End User) Ad Services Information Provider (Business) RELEVANCY

Can Yahoo get MS to the future? What does Yahoo bring? Web search #1 in users  500 million users  88 million home page visits (source: Yahoo! Corporate Overview August 2007) Ad Services Does it add to MS? MSN But  Not #1 in search  Brand loyalty? MS has that too

Yahoo search doesn’t add value Page level search engine like MSN  Searching text strings Results (relevancy) is not any better

Yahoo has a lot of users, but it’s not the search market Google gets most searches now  With existing search technology Yahoo (and MSN) now have the same, but too late A better search can win them all

Panama Yahoo’s ad ranking engine  Determines what ads show up in an end user’s search Spent a lot of time and development $$  Released 1Q 2007  Hasn’t been the home run that was anticipated Revenue is not up substantially Did not exceed it’s target - Google MSN’s AdCenter = Panama + demographic filtering

Other ad services Yahoo does offer other ad services that MS was lacking  Statistical tools  Consulting  Publishing wizards  Among others Purchase of aQuantive in May, 2007 filled this gap

MS Business Model Steve Ballmer, CEO Stated vision  “Help people reach their potential”  Innovation – passion for technology Reality – innovation in a way  Take existing technology Repackage it Enhance it Build it into a platform Make it all more accessible & relevant

Summary “I skate to where the puck is going to be, not where it has been.” -Wayne Gretzky Yahoo offers current technology at an expensive price ($32 B market cap.) MS has and can develop what is needed for the future without spending the money for Yahoo!