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Microsoft : A long way to go

Amidst the failure of Microsoft and Yahoo’s deal which was on high for last three months, Google is the winner. MS that valued Yahoo for $47.5 billion was seeing it as a lucrative deal to settle the scores with Google. But deal failed and finally both decided to go their own ways.

 

As per the latest rumors it seems that Google and Yahoo will settle down for some advertisement deal. The analysts take it as an opportunity for Google as its both strong competitors have gone separate and the deal has soured. They take it as a setback for Microsoft which had started to work on for a strategy to compete with Google in online advertising. It seems that Microsoft was much convinced that getting the online ad business right is essential to Microsoft's future watching the online trend picking up fast and specially watching Google setting unmatchable and “Numero uno” standards across the world. No wonder the former is threatened even towards its mere existence.

Google being the undisputed online leader sure dominates the market with 77% share of revenue generated from those little text ads that show up alongside the results for Internet search queries. Microsoft, after years of trying, is at 5% of US search revenue. But Microsoft can give a blow to Google on several other fronts. Most prominently on display advertising, the colorful banner and video ads that runs at the top or along the side of Web pages. Microsoft is among the leaders in the fragmented field, while Google is a bit player. Although the display market is smaller than search, it's expected to grow faster over the next few years because of a surge in video ads. According to figures by market research firm IDC by 2012 the display market will double, to $ 15.1 billion; revenue from search will reach $ 17.6 billion. Microsoft makes money in the display business in two ways: one by placing ads on its popular sites like MSN and Hotmail and secondly, by placing ads on other web sites and then splitting the revenues.

In display advertising, Microsoft has the most sophisticated technology of any company and can help advertisers precisely target display ads


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