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February 01, 2008

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John Flanagan

I very much enjoy reading your posts and want to respond to the potential Microsoft-Yahoo marriage. I am a long time advertiser on both programs, but spend 90% of my PPC dollars with Google. I would very much like to have a successful merger of Microsoft and Yahoo to provide a more competitive market for my ads.

My concern is that Microsoft will not learn from the failure of Yahoo and will continue to keep in practice the primary, and maybe only, failing of Yahoo to succeed in the PPC market. Yes, Yahoo has failed and that is precisely why MS is ready to rescue them. Falling stock, falling revenues, and failing goals are all directly related to a failure to keep and grow Yahoo paid ad revenues. This failure is not due to anything other than advertisers like myself do not want to participate with the fraud that is perpetrated on them with Yahoo’s Channel Partner ad distributors.

Yes, Google does a much better job at monetizing their web pages, but it is not because of their ad auctioning system and ad targeting algorithms”. Advertisers like myself have simply stopped using Yahoo to any significant degree. If Microsoft does not address this issue, it will simply get the same results experienced by Yahoo. MS needs to start completely fresh with the Yahoo Channel Partner program and refuse to let the gross abusers in the program participate any longer. Advertisers need to feel there is some ROI rationale connected to the ad expenses paid to Yahoo. When they do, they will respond with more ads and be willing to pay higher per click rates. Google knows this – Yahoo failed to control fraud and abuse and suffers the consequences.

I actually find the current Yahoo PPC program easier to navigate and easier to get placement in exactly the location I choose. Up until two years ago I spent about 60% of my on-line ad dollars with Yahoo and about 40% with Google. Based on the dramatic declines in Yahoo’s posted quarterly ad revenues, I posit that many other advertisers are also doing the same kind of switch. My CTR (click through rate) tells me potential buyers have clicked on my PPC ad and may purchase my product or service. This is how I justify my ad expenses. And, this is how I pay for my ad expenses.

I am very hopeful Microsoft will be able to see and correct this most crucial problem of fraud and abuse within the Yahoo PPC Channel Partners program. Success (and my PPC ad business) will be with Microsoft if they make this simple and necessary choice.

Andy

interesting.......good post

John Bushelle

Business combinations, merger, acquisition, and joint venture are not easy to execute and they most often don’t live up to their expectations. There have been several studies done on mergers and acquisitions announced in the last 20 years and in well over 60% of the cases the synergy was not realized. When synergy doesn’t materialize the acquiring company ends up damaging shareholder value because premiums paid to take a significant equity stake in a target company are not recouped. However, by understanding a company’s motives for buying, selling, or partnering a business, how the decision fits in with their overall corporate strategy, and the careful identification of the characteristics of an ideal target, the chances of success can be greatly increased. effective post merger integration is a big key to success.

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