Yahoo Microsoft: A Horizontal Romance, Or A Broken

Yahoo Microsoft: A HorizontalRomance, or a BrokenRelationshipBy Ryan, Cristy, Alexis, Joe

OverviewHorizontal Integrationy Market Sharey Brandingy Company Informationy Industry Informationy A Story of Heart Achey The End?y

Horizontal Mergers/IntegrationyWhat is Horizontal Integration? Examples:yWhy Do Companies Horizontally Integrate?o Reduced Competitiono Lower Production Costso Managerial Reputation

Horizontal Mergers/IntegrationContinuedyU.S Horizontal Merger Guidelines1. Define the Market2. Concentration - Herfindahl-Hirschman Index(HHI)3. Assessment

Market ShareyWhat is Market Share?yExpressed in Two Ways:1. Revenue2. Unit VolumeyIncreasing Market Share

Branding ManagementyWhat is Branding?yBrand Name PromiseyWhat Makes a Good Brand Name:o Pronounceo Remembero Recognizeo Attentiono Suggesto Stand Out

Branding ManagementContinuedyThree Types of Brand:1. Premium Brand2. Economy Brand3. Fighting Brand

Branding ManagementContinuedyBrand NamingyBrand Leveraging Corporate Family Individual

Brand ManagementContinuedyBrand Strategies Mother Brand Endorsed Brand Product Brand

Yahoo! Inc.Founded in 1994 by Stanford Ph.D. students David Filoand Jerry Yangy Incorporated in 1995yTo usersy To Advertisers and Publishersy To DevelopersyooYahoo! generates revenues by providing marketing services toadvertisers across a majority of Yahoo! Properties and Affiliatesites.Additionally, although many of its user services are free,Yahoo! does charge for a range of premium services that itoffers.

Yahoo! Inc. Continued yThe Company's offerings to users fall into fivecategories:ooooSearch – Yahoo! Front page, My, ToolbarCommunications and Communities – Yahoo! Mail, Zimbra, Messenger,Groups, 360 and FlickerMedia Information – Yahoo! News, Finance, Sports and Rivals Entertainment –Yahoo! Music, Movies, TV, Games, Video and omg! Life Style – Yahoo! Autos, Real Estate, Food, Tech, Kids, HealthConnected Life – Co-branded broadband, Yahoo! Moblie Digital Home, Desktop

Microsoft Corp.Microsoft Corporation, incorporated in 1981y Develops, manufactures, licenses and supports a range ofsoftware products for computing devicesyOnline offerings and information are delivered through itsWindows Live, Office Live, and MSN portals and channelsy The Company enables the delivery of online advertisingthrough its adCenter platformy

Microsoft Corp. Continued yFive Segments of Competition1.Clientx2.Apple Computer, Hewlett-Packard, IBM, Mozilla and Sun MicrosystemsServer and Toolsx3.Packard, IBM, Sun Microsystems, Novell, Red Hat, VMWare, ComputerAssociates, Oracle, BMC, McAfee, Symantec, etc.Online Services Businessx4.AOL, Google, Yahoo! and EarthlinkMicrosoft Business Divisionx5.Apple, Corel, Google, IBM, Novell, Oracle, Red Hat, Sun Microsystems,AjaxWrite, gOffice, etc.Entertainment and Devices Divisionx, Sony, Apple iPod, Nokia, Openwave Systems, Palm, QUALCOMM,Research In Motion, etc.

Google Inc.Google Inc., incorporated in September 1998Maintains an index of Websites and otheronline contenty Instant access to relevant information from itsonline indexyy

Google Inc. Continued Google generates revenue primarily bydelivering online advertisingy Google Docs allows the Company's users tocreate, view and edit documents,spreadsheets, and presentations fromanywhere using a browsery

The Other Players?yTime Warner Inc. (AOL LLC) AOL operates a Global Web Services business thatprovides online advertising services AOL offers advertisers a range of advertising services Competes with Yahoo! Inc., Google, Microsoft Corporation,Fox Interactive Media, Inc. and Facebook, Inc.yNews Corp. Entertainment company with operations in eight industrysegments

Online Advertisement

Online AdvertisementContinued Numbers of Impression 421276561415Web Media6592811795250515Public Services11795170862422Retail Goods6816689882270257205154014537Travel

Online AdvertisementContinued Click Though RatesIndustryFinancialServicesWeb MediaPublic ServicesRetail 0.02%22.33%30.15%0.08%0.57%0.64%0.05%4%4.57%0.51%

Online AdvertisementContinued

Soap Opera: All My InternetsThe History of the Yahoo – Microsoft Courtship

Early 2006 The GossipBeginsSpeculations aboutMicrosoft'sCourtship ofYahoo Stirs Up

December 2007yGoogle buys outDoubleClick Inc.whichMicrosoft and Yahoo alsoexpressed interestyGoogle also has 5%Ownership of AOL

January 31, 2008:The FirstRejectionYahoo rejects a 44.6billion dollar, 31 ashare, offer fromMicrosoft saying that itundervalues thecompanyYou don’t appreciate myworth!

Shortly AfteryFebruary 13, 2008 Yahoo buys on-line video advertising companyMavenyFebruary 26, 2008 Yahoo introduces a new video service calledYahoo Buzz

March 5th, 2008Yahoo states theyare extending theirdeadline tonominate boarddirectors to 10days after theirannual stockholdermeeting

The Third WheelRumors circulatethat Yahoo islooking to mergewith Google

April 5th, 2008CEO StevenBallmer speaksup!He writes ademanding letterto the CEOs ofYahoo,threatening to turnhostile if Yahoocontinues toevade discussionswith Microsoft.

Steven Ballmer: The Man, theMyth, the Sweaty guy?

April 7th, 2008Yahoo executives write a letter back toBallmer saying that they are not closedto negotiation but will not accept sucha low offer

Aprilth9 ,2008Yahoo announces atest advertisingpartnership withGoogle usingGoogle’s ad sensefor a two-weekperiod

And the Gossip Continues

Thank You!

News, Finance, Sports and Rivals Entertainment -Yahoo! Music, Movies, TV, Games, Video and omg! Life Style - Yahoo! Autos, Real Estate, Food, Tech, Kids, Health o Connected Life - Co-branded broadband, Yahoo! Moblie Digital Home, Desktop