Sunday, February 03, 2008

Microsoft plus Yahoo! Strategic Assets in Email

Microsoft plus Yahoo! Strategic Assets in Email

So much of the chatter around Microsoft's proposed acquisition of Yahoo! revolves around competition with Google in the online advertising market. While that is a huge market, one that Google now dominates, and one that Microsoft has a jones for, that's a very narrow way to view the combination. And for Microsoft, it could be a fatal mistake to take the battle to Google on its own ground. That's the very mistake that companies like Netscape made in competing with Microsoft.

Remember that the key advantage in Web 2.0 applications comes from data assets built via network effects (and then ultimately, the ability to monetize those data assets). Thinking that way changes the calculus of this deal. Where is the high ground for Microsoft plus Yahoo!? I don't think it's in the combined advertising heft, despite the fact that advertising is currently the bulk of the monetization value

From Internet Marketing

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