-By Scott Cleland
I can’t say I’m at all surprised to see Microsoft seek to acquire Yahoo.
It makes obvious business sense for both Microsoft and Yahoo — it is the only viable and strategic option for either company to become a serious and credible competitor to Google-DoubleClick’s rapidly increasing dominance of search and Internet advertising.
And given the FTC’s surprisingly strong consolidation-endorsing analysis of the Google-DoubleClick merger — previously-perceived as a yellow antitrust light to such a merger by Microsoft — there is now a bright blinking green light for approval.
Timing-wise, it’s obvious to Microsoft to get approval now while the getting is so good.
Moreover, Yahoo’s faltering stock begged Microsoft to “Come on down! and play ‘The Price is Right!'”
Essentially, the FTC paved the road for antitrust approval of a Microsoft-Yahoo combination with its recent 4-1 approval of Google-DoubleClick.
The FTC ruled definitively two months ago that the Internet advertising market has “vigorous” competition, which “will likely increase.”
The FTC also did not do “Second Requests for Information” for either Microsoft’s acquisition of Aquantive or Yahoo’s purchase of Right Media.
Given that the FTC just did a 7 month analysis of this market last year in the Google-DoubleClick investigation, and acquainted itself closely with Yahoo and Microsoft’s respective competitive positions, it is possible that the majority of the FTC would not even see the need for a “Second Request for Information” for a Microsoft-Yahoo deal — why waste the taxpayers money?
Moreover, the recent court extension of the Microsoft decree for another 18 months ensures that the past competitive issues involving the desktop are essentially moot and irrelevant in the context of a potential Microsoft-Yahoo FTC review because they are already taken care of under that decree.
Given my in-depth www.Googleopoly.net and my analysis of this marketplace in the Google-Doubleclick merger, and my testimony before the Senate Antitrust Subcommittee, I strongly agree that the Internet advertising market demands scale — just like Microsoft explained in its conference call.
Combining Microsoft and Yahoo would at least give them a shot at becoming a serious and credible competitive alternative to the increasingly dominant Google-DoubleClick.
Without this combined entity as a new and enhanced competitor, this market is Googleopoly-bound. _________________
Scott Cleland is one of nation’s foremost techcom analysts and experts at the nexus of: capital markets, public policy and techcom industry change. He is widely-respected in industry, government, media and capital markets as a forward thinker, free market proponent, and leading authority on the future of communications. Precursor LLC is an industry research and consulting firm, specializing in the techcom sector, whose mission is to help companies anticipate change for competitive advantage. Cleland is also Chairman of NetCompetition.org, a wholly-owned subsidiary of Precursor LLC and an e-forum on Net Neutrality funded by a wide range of broadband telecom, cable and wireless companies. He previously founded The Precursor Group Inc., which Institutional Investor magazine ranked as the #1 “Best Independent” research firm in communications for two years in a row. His latest op eds can be seen at www.precursorblog.com.