Yahoo Sued for defective Ad System

A class action lawsuit has been launched against Yahoo claiming it mislead investors that its new ad system would make more money.



read more digg story

Breaking News - Microsoft pursuing Yahoo for merger

New York Post and the WSJ.com reported today (4 May 2007) of a possible merger between Microsoft and Yahoo to combat the growing influence of Google . The rationale of the merger would be to compete with the scale and the search capabilities of Google and the failure of the Panama search engine ,which has widening the gap between Yahoo and Google and coupled with Google's plan to develop web based software which directly competes with Microsoft Office , makes it imperative for Microsoft to react now .

Charlene Li analyzes the possible implications of the merger and opines that while on paper there are synergies in the merger , but the combination (Microsoft+ Yahoo) may not be able to deliver the goods that are the strategic intent of such a combination

Google could be one of the bidders for Dow Jones

Rupert Murdoch's $5 billion takeover bid of Dow Jones and Co has sparked of an auction for the 125 year old publisher . This first leg of the drama has been reported by Bloomberg

Michael Chren, managing director of Allegiant Asset Management Co. in Palm Beach Gardens, Florida quoted that other bidders would include General Electric (owner of the CNBC network) , Washington Post and even Google Inc .

Jon Murchinson, spokesman Google, declined to comment, Washington Post Chief Financial Officer John Morse wouldn't comment, while Jack Immelt of GE negated the news .

Google watchers , will keep you updated on this from Google's perspective.......

Google responds to Viacom's suit on YouTube

Viacom in a suit filed in March 07, alleged that YouTube was guilty of building a library of copyrighted video clips without permission and thereby blatantly violating copyright norms . Google's response has relied heavily on the of the "safe harbor"provision of the Digital Millennium Copyright Act, enacted in 1998. The New York Times quotes ...."Those provisions generally hold that Web sites’ owners are not liable for copyright material uploaded by others to their site as long as they promptly remove the material when asked to do so by the copyright owners "

The Technology section of the New York Times carried a detailed article on the subject

This article is an interesting read for Google watchers and a negative outcome of this suit may significantly alter the fortunes of YouTube and impact Google's overall strategy adversely. More updates soon......

Yahoo buys off Right Media for USD 680 million

Yahoo announced in 30 April 2007 its decision to buy off the rest of Right Media Inc for USD 680 million (it had already bought 20% of the company in October 2006) . Right Media's business model is unique ..... for an advertiser the network facilitates buying media through a transparent process in an auction-based exchange. The model ensures that network barriers come down, giving the advertiser open access to the entire market of sellers and their inventory. Because the advertiser now manages all sellers in a common platform, it gives him a a clear sense of how his advert objectives have been served, where the best new users lie. Bidding for each impression based on the value it generates and therefore and advertiser never overpays .

This acquisition is a strategic move to bridge the gap between rival Google's pay-per-click advertisements that run alongside its search results and also the growing popularity of Google Adwords . It is interesting to note that Yahoo has been trying to migrate to a similar revenue model like Google for quite sometime now , Project Panama is also a step in this direction . However Project Panama has failed to deliver at least till now (as borne out by the Q-1 results of Yahoo) , therefore this acquisition could well be the last throw of the dice by Yahoo to get close to Google . It is also important to note that the Google -DoubleClick deal has been completed only recently and the impressive Q-1 results of Google do not include the financial impact of the deal . Google analysts say that post the deal , DoubleClick is working in creating an ad exchange (which is what Right Media also offers ...)

Financial Implications

At the time of acquisition ,Right Media had around 20,000 advertisers, publishers and networks to its online advertising exchange. In its advert network it has 1,000 customers on whose behalf it sells advertisements and its revenue is projected at USD 70 million this year and is expected to break even by the end of the year

Financially I don't think this acquisition is going to make a difference to Yahoo's results this year , because the deal is expected to be closed in Q-2 of this year . Analysts say that the valuation's are a bit pricey , however strategically the deal is expected to boost Yahoo's fortunes in the display advertisement business .

In conclusion

Considering the deal price and the fact that DoubleClick is creating an advertising exchange of its own , I am personally not hopefully that this acquisition would make a significant contribution in reducing the gap between Yahoo and Google in the display advertisement segment....however the Yahoo management is still bullish on Project Panama and what it can deliver .....so lets wait and watch ......

Yahoo vs Google - Yahoo earnings falls by 11%, Google expected to do well !!

A regular reader of my blog would know that I have been tracking the Yahoo vs Google story since April 11 , it all started with the announcement of the Yahoo-Viacom deal ....and this is the fifth post on the subject in seven days . In my post of 11 April , I had asked some strategy questions and and possible options that Yahoo had to challenge Google's supremacy . Yahoo's top brass has been focuses this year on Project Panama which is a overhaul of the company’s search advertising system, which would be similar to Google Adwords and hopefully increase revenue and close the growing gap with Google . Project Panama is a strategy implementation project and the others elements of its strategy were the content partnerships with Viacom and the collaboration with McClathy group of newspapers . If one were to look at the Q-1 results Project Panama has not delivered (not at least for the time being ) the net income for the first quarter fell 11 percent from a year earlier, while revenue, was up 9 percent. The Yahoo top brass in their guidance have said that the positive effects of Project Panama on Yahoo’s bottom line would begin to be felt later this year as the system is rolled globally. Is Project Panama, unique ? is it a good enough competitor to Goggle Adwords , these are million dollar questions .

On the contrary analysts say Google will do well in Q-1 ,


It seems round one goes to Google.......

Update on 20th April , Google profits go up by 69%

Online Advertising - Yahoo responds

The battle for online advertising hotten's up every day . After Google's buy out of DoubleClick , its was interesting to see Yahoo respond today (17 April) with the announcement of its alliance with the McClatchy Newspaper chain and four other companies to its recently formed online ad-sharing network, this strength of the alliance includes 12 publishing companies, representing 264 U.S. newspapers, that are all set agreed to collaborate with Yahoo in selling advertisements and will feature Yahoo's search engine on their online editions, locking out Internet rival Google.

The recent war for online adverts started with the Viacom-Yahoo deal which I reported in 11 April , this was followed by the Google-DoubleClick deal on 15 April and the Microsoft anti trust motion against Google on 16 April . Within a week we have had 3 major deals and one anti-trust motion ...whoever though that the world was a dull place ....was WRONG.!!.... Frankly I was looking for a response from Yahoo particularily after the DoubleClick deal ...but was not anticipating it so fast ....seems like Yahoo has a well defined strategy to match Google blow by blow,..... which makes the story really fascinating . Now we have two sets of alliances (Google-DoubleClick combo vs Yahoo-Viacom-McClatchy) fighting for the USD 10 bn Internet advert market , I will definitely not hazard a guess on who will win eventually , but have a limited point to make ....the Google-DoubleClick deal gives Google a distinct advantage with introducing flash banner and video adverts while the Yahoo alliance is primarily strong in the text adverts arena ......whats next ....a billion dollar question ....whats Microsoft going to do ....is it going to push the anti-trust issue against Google to nullify the DoubleClick deal ....watch this space for more updates ......

Online Advertising -Miscrosoft responds to the Google -DoubleClick Deal

Yesterday , I had reported about the Google-DoubleClick deal which was soon after the Viacom -Yahoo deal was sealed . Today Microsoft Corp has raised antitrust concerns...Brad Smith, General Counsel for Microsoft quoted in the Washington Post today .."By putting together a single company that will control virtually the entire market . . . Google will control the economic fuel of the Internet," .The response from Microsoft (... a losing participant in the DoubleClick bidding process) itself a veteran defendant of epic antitrust battles in the United States and Europe is indeed ironical ...does Microsoft has different standards for itself and others ...!!!

The real issue however could be that the online internet advertising market is witnessing a healthy 17% growth , making it a USD 10 billion industry today .The deal is definitely going to provide more completion and make the Internet more vibrant and content rich

It is interested to note the comment of Jordan Rohan an analyst with RBC Capital Markets quoted to the New York Times ....“Keeping Microsoft away from DoubleClick is worth billions to Google, .....Yet again, Microsoft is on the sidelines and away from the action.”

So is Microsoft genuinely interested on issues of monopoly and anti-trust ? or has it been completely outmaneuvered by Google .....only time will tell....

Yahoo vs Google -Google buys DoubleClick

On 11 April , I had written about the Viacom-Yahoo deal and how it could potentially impact the online advertisement market . In the post I had analysed (to a certain extent) the implications of the Viacom-Yahoo deal and how the twosome were poised to take on the Google ecosystem . While writing the post , I was not aware that the online advert scenario would change so fast with Google announcing the purchase of Double Click for a sum of USD 3.1 bn yesterday -14th April . DoubleClick is primarily engaged in the delivery of Internet advertising with the provision of mobile marketing activities.This acquisition is in line with Google's strategy to expand its foothold in online advertising ,and transforming Google from a search engine to an advertising powerhouse . This deal is an interesting twist in the battle between Yahoo and Google for supremacy in the online advertisement market . The Google buy out of Double Click would mean that users like you and me would get more advertising tailored to their online habits, especially if DoubleClick and Google combine some of their huge databases of information on Internet use to direct specific ads to different Web surfers’ tastes.

Google, traditionally , has made most of its money in the online basics: the text-based search engine and small text ads , DoubleClick’s core strength, by contrast, lies in flashy banner ads and, more recently, video ads that are more like high-end magazine or television ads. This synergy is expected to up the quality of advertising content that Google was known for and hopefully enhance revenues .

As expected the sale of DoubleClick involved a complex and long negotiation that included at one point Yahoo, AOL and, most prominently, Microsoft, which has been trying to position itself as an advertising rival to Google.

The New York Times reports "....The acquisition will also strengthen Google’s position with respect to Yahoo, its chief rival in Internet search and advertising and a leader in the sale of display ads...".

How is Yahoo going to respond to the new challenge.........whats Yahoo's next move...keep watching this space for updates .....

Online Advertising -Yahoo vs Google

Yahoo will be remembered as one of the first Internet success stories which pioneered the search engine and online advertising , however in the recent past it has been totally eclipsed by its younger and formidable rival -Google . To an average Internet user like me , Google is now part and parcel of my life , ....when Google introduced Gmail with features which was not available with Yahoo, I shut down my Yahoo account , and after buying off orkut and blogger , Google actually locked me in as a user . The relationship with Google became stronger with Google AdSense , Google Analytics (I track the page views on my blog through analytics ) , Picasa , Google Earth and Google Desktop . As a former Yahoo user (and I have been one for many years) , these integrated services made my shift to Google seamless (I use my Gmail Id to log into orkut, G-analytics , G-AdSense, Picasa etc...). As a reader ,you would now be wondering that this post is a small lecturette on Google strategy and how it overtook Yahoo .......that is not the intention.....I would like to draw the attention of the reader on the new twist to the Yahoo vs Google battle based on Viacom advert deal , concluded yesterday .

In financial terms Google has left Yahoo far behind by becoming the Internet's largest advertising network, Google last year earned $10.6 billion (Net Profit $3.1 bn), compared with Yahoo's $ 6.4 billion (Net Profit $ 751 million) the profitability of Google is at 29% and the same for Yahoo is 12% .... Google's market value is $145 billion, compared with Yahoo's $43 billion...... The gap seemed to be too large to be bridged ...... as you logged into Orkut.com , you would notice these small text adverts on the right of your screen , similarly for Gmail .The Google dominance over Yahoo on the Internet advert business seemed complete till yesterday when the Viacom deal was announced .Viacom said yesterday that it picked Yahoo as its online advertising partner in a multi-year deal that could help Yahoo become a more formidable challenger to Google . Viacom with its suite of websites (MTV.com, VH1.com, Nickeldeon.com ...) will provide a platform for the text adverts which Google dispalys through Gmail or an Orkut .

The deal seems formidable on paper and promises to help Yahoo to increase it's pie in the online advertising business , howver an the key question that comes to my mind is -

"How will it lock a user" to click on the advert only from Viacom's websites ?

In the case of Google , it provides an complete suite of services which are based on a single login , and therefore a typical user is locked into the world of Google . These dedicated users click on the small text adverts and with Google's alliances with MySpace and AOL makes it an interesting eco-system to combat ...and this raises the follow up question , which is :

Does the Viacom-Yahoo deal make the twosome an advertising ecosystem which has the scale and muscle to take on Google ?

I don't have the answers but hopefully somebody in Yahoo Inc does , it would be interesting to follow the Yahoo vs Google battle and the dynamics of the Internet advertising industry .