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Microsoft can buy second place, but can it win race?

February 07, 2008 | Internet Marketing

Yahoo's believed to have the larger advertiser base, and it has already migrated those advertisers to its Panama platform. They likely won't take kindly to moving to AdCenter. But would Microsoft really toss out a system it spent years building?

Microsoft should have bought Yahoo years ago, writes Danny Sullivan for AdvertisingAge. In 2003, Microsoft made a decision to build its own search platform to serve editorial search results and ads. Yahoo went a different direction, buying the technology it needed. Snapping up Inktomi ads for $235 million gave it search results that today rival Google’s. Overture was a $1.6 billion deal, but it gave Yahoo control of a huge paid-search business. Most importantly, it allowed Yahoo to keep pace with Google rather than waste time playing catch-up.

Think of it as a race: Yahoo and Microsoft looked up and saw Google scream past them in a sports car. Yahoo looked for a fast car nearby, gave the owner cash and sped off after Google. Microsoft entered the race by building its own car from scratch.

It was a costly delay. Sure, search is going to be a long race, and Microsoft might eventually catch up. That certainly was Microsoft’s battle cry after short-term initial gains didn’t happen. But we’re coming into year five of Microsoft’s dash after Google, and while Microsoft built a nice car, it has failed to keep pace with Google—much less Yahoo.

Get the full articel at AdvertisingAge

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