Monday, February 04, 2008

Microsoft / Yahoo Merger and implications for australian media

Yahoo Logo
The Microsoft $44.6Billion bid for Yahoo! may turn out to be one of the best acuisitions the industry will see for many years. The deal is by far the biggest in the media and technology sector since the $112 billion price for group America Online (AOL) in its unfortunate merger with media giant Time Warner.

MSN International vs Yahoo International

TechCrunch commented on the Australian implications ...
Outside of the United States gets more interesting as both Yahoo and Microsoft have co-ownership agreements in many international markets, for example Yahoo7 vs Ninemsn in Australia. Many of the existing partners are also commercial rivals in respective markets, causing issues for a combined Microsoft-Yahoo maintaining all existing partnerships. There may also be competition concerns in some markets as well.

It is widely anticipated that existing partnerships will be divested with a greater chance of maintaining Yahoo’s deals. This means that the Nine Networks dominance of the internet through their very clever deal with Microsoft forming Ninemsn may come to an end. Ninemsn was formed in 1996 after Microsoft failed in its first portal attempt - the short-lived, pre-internet "bulletin board" venture On Australia, in partnership with Telstra.

Back in October 2007, Australian IT reported on the shakeup at Yahoo in Australia. Australia is a surprisingly strong market for Microsoft, with its local joint venture NineMSN holding a 26% share of main ad buying marketplace (corporate buys), followed closely by News Corp and local media group Fairfax Digital, who operate well known sites including and a variety of ecommerce ventures.

The implication has large ramifications for Ninemsn - of interest would be how quickly Microsoft Yahoo would change the default browser settings to Yahoo7. Below is a chart showing the visitors for both Msn and Yahoo.

Yahoo vs Microsoft Visitors

Furthermore, the booming $1 billion online advertising market in Australia will be considerably reshaped if Microsoft's $49.6 billion bid for online media group Yahoo succeeds.

Update:Herald Sun has reported that the Seven and Nine networks could be working together on a combined WEB portal.


Curt Monash said...

As per , there's a lot of technological potential in this merger. The partner that's kept is likely to be the partner that wins.


Tim said...

Microsoft is paying a considerable premium for this deal.

Tony said...

Both the nineMSN and Yahoo7 portals are very established top 10 traffic portals in Australia. It would be a brave person that would make the decision to disband one of them.