Monday, May 21, 2007
  • Ross Fadner, May 21, 2007, 10:45 AM
  • AOL, MSN Acquisitions Make Mobile Web Better Place It's almost baffling how bad the mobile Web experience is. The explanation is a long one, but suffice it to say that the mobile carriers' dictatorial position over the mobile Web doesn't help. But despite its being a challenge for users, Web companies and thus, advertisers see big potential in the mobile market.

    For advertisers, navigating the complicated landscape requires middlemen like Third Screen Media, purchased last week by Time Warner's AOL, and ScreenTonic, acquired a few weeks ago by Microsoft. These companies have spent years building publisher and carrier relationships, and the addition of AOL and MSN just made them a whole lot bigger. Mobile networks like Third Screen enable advertisers to reach a broader swath of consumers, and analysts say they have serious potential. As eMarketer analyst John Gauntt says, "They've hacked through the jungle already," in terms of working out all the advertising kinks. The AOL and Microsoft acquisitions mirror the spate of ad network and ad-serving acquisitions online. Gauntt says the time is now to snap up these kind companies before the price shoots up.

    EMarketer believes--and this is very optimistic--the mobile Web will command $4.8 billion in ad spending by 2011. To reach that figure, growth would have to yield far greater investment in mobile Web technology, and then innovation would make it an easier place to do business. Read the whole story...
  • Google, Salesforce Partnership Would Challenge Microsoft Google is exploring the possibility of teaming up with to better compete with Microsoft in corporate communication and customer-relationship management services, one of its core business sectors. The report is short on details, but it speculates that a deal would be about integrating Google's Web-based services, like email, instant messaging and Google Apps, with's CRM tools, also Web-based. Microsoft's productivity tools, of course, are software-based.

    Microsoft and Google have been competing in search and email for several years, but the corporate market has long been the province of Microsoft. Search giant Google only entered the field a few months ago through the enterprise-level offering of Google Apps, which consists of Google Docs & Spreadsheets, Gmail, Google Talk and Google Calendar.'s CRM tools would likely be an optional add-on to Google Apps. The Web-based services are attractive to businesses (particularly startups) because they're far cheaper, though Microsoft's software offers better security.

    On Friday, Google said it was releasing a new product called Google Apps Partner Edition, which has both a free service, as well as a package that include phone support and marketing services. In response to Google's ultra low-cost services, Microsoft is said to be preparing Web-based versions of its CRM software, too. Read the whole story...
  • Schmidt: Internet To Shape Politics, Education As Microsoft was announcing its acquisition of aQuantive on Friday, Google Chief Eric Schmidt discussed the effect of Internet technology on world politics. To be sure, it's a game changer.

    For example, "George Bush never could've been elected president if he'd been at Yale now, and there'd been cell-phone cameras around," said his interviewer, New York Times Thomas Friedman, referring to W.'s college partying days. To be fair, Bill Clinton most likely wouldn't have been president, either. Tomorrow's politicians will have to be extra-careful, as the past can now come back to haunt them like never before.

    To that point, Schmidt said jokingly, "I have a societal proposal. I think that at the age of 21, it should be OK to change your name." He added that the benefits of global connectivity are "overwhelming the concerns that everyone has," making it "a much better world as a result." Education will change, he said, as university students will be taught how "to confirm their biases" through the search for information, while taking note of sites that debunk their convictions to fortify those assertions. "You'll literally be taught how to search," he said. Read the whole story...
  • Report: Microsoft May Yet Go For Yahoo In a research note last Friday, Goldman Sachs analyst Anthony Noto said Microsoft's $6 billion acquisition of aQuantive raises the likelihood that the software giant will buy rival Yahoo as Microsoft ramps up its battle for Web supremacy with Google, Inc.

    Yahoo would plug a "strategic hole" for Microsoft that won't be filled by the purchase of aQuantive. Microsoft would still require another 500,000 advertisers to effectively compete against Google. Yahoo, which does not do business with new Google acquisition DoubleClick, would bring advertisers to the table, in addition to a huge user base, a wide variety of content and significant content partnerships-areas where Google couldn't realistically compete.

    Noto said the aQuantive acquisition shows that "Microsoft is willing to do deals that are a strategic necessity ... we believe the odds of a deal happening over time actually increases." A buy or a strategic partnership for Web search and advertising have been part of ongoing negotiations between the companies. Several reports claim these talks have fallen flat due to reticence on the part of Yahoo. In another research note, Merrill Lynch analyst Justin Post said it will take Microsoft months to incorporate aQuantive's operations, which makes a Yahoo deal less likely in the next few months, though he sees no other potential buyer. Read the whole story...
  • Why Microsoft Paid $6 Billion For aQuantive Microsoft's purchase of aQuantive last week could easily be perceived as an act of desperation. With a $6 billion price tag, it would appear that Microsoft overpaid, shelling out close to an 80 percent premium on the company's expected 2007 earnings in the all-cash deal.

    Why pay so muc?s. Well, the Redmond, Wash. giant, worth $293 billion, certainly has the cash, but to understand the valuation, it's important to look at the value of its three core businesses: Avenue A/Razorfish, Drive PM and Atlas. The first two are services-based businesses, which launch Microsoft into new territory. You pay a fee and Avenue A/Razorfish will design you a Web site or create an campaign. With the ad network Drive PM, you set your own premium for buying targeted audiences or sales conversions through its ad network. The third, Atlas, is an ad-serving technology provider that competes with Google's DoubleClick.

    Microsoft was less interested in Avenue A and Drive PM than it was in Atlas. Those two units will likely continue to operate on their own, but Atlas is more likely to expand Microsoft's business, because it's a full-service advertising platform and it's software-based, which is the company's specialty. In short, Microsoft needs the technology to allow them to deliver content, advertising and media to their captive eyeballs. They do not own it and do not have the time to build it, which is why Microsoft paid so much for aQuantive. It had to win this one. Read the whole story...