Impact on Ad Exchanges?: Microsoft Bids $44.6 Billion to Buy Yahoo!
Posted by Jay Sears on Fri, Feb 01, 2008 @ 07:28 AM
[read followup - Advertiser Impact of Microsoft - Yahoo! Combination]
Just out–Microsoft has bid $44.6 billion, or $31/share to buy Yahoo! The bid is a 62% premium over yesterday’s closing price for Yahoo! This is a long rumored combination. Many question if this is a cultural mismatch, although surely the market and the media business will welcome the news as:
1. A solution to Yahoo!’s woes
2. A welcome sign of an acquirer spending big money
3. A serious combined challenge to Google’s hegemony in the online advertising space.
We estimate the impact two ad exchange products in question–Microsoft and MSN’s AdECN (bought last year for $50-75 million) and Yahoo!’s RightMedia (bought last year for $800 million), to be minimal, at least in the immediate future. Both of these ad exchange products focus on remnant inventory and solving the remnant inventory problem for large publishers and ad networks. In fact, AdECN exclusively works with ad networks, while RightMedia in largely composed of ad networks and large publishers such as Yahoo! [We contrast the remnant focus of these ad exchanges with the focus of ContextWeb’s ADSDAQ Ad Exchange on providing advertisers control around premium, contextual inventory from large and small sites.]
[read followup - Advertiser Impact of Microsoft - Yahoo! Combination]
Links: Microsoft’s Press Release on Yahoo! Bid
-- Jay Sears
