Marketing Daily caught up with Mike Jones, founder/CEO of Userplane, at AdTech in San Francisco. He shared his thoughts on a potential Yahoo/AOL merger and what it would mean for the companies.
Q: What would an AOL/Yahoo merger look like?
A: Jeff Bewkes (Time Warner president and CEO) will do what's best for Time Warner shareholders. My hope is that he will also consider what's best for the AOL brand. I hate to see the AOL brand washed away or clouded through a merger with Yahoo, but I also feel AOL is a company that needs a public currency to compete. Without a publicly tracked stock, or one that doesn't become diluted by Time Warner's other holdings, it becomes difficult for AOL to attract and retain top talent. It also would drive people to innovate inside the company. I'm excited for a world where AOL has that type of currency, and it could be gained through a merger with Yahoo.
I haven't gone through the products to understand where AOL and Yahoo work well together and where there is duplication. First you answer the question--where does the merger sit with Time Warner shareholders? Then you look at where products are similar, and will the final company be big enough to compete with Google and others.
Q: What's the motive behind the merger?
A: It's simple. If there's potential for Time Warner shareholders to see a larger volume of return, it's something Time Warner absolutely must do. I would love to think Bewkes is so into technology that he has personal feelings about saving Yahoo from Microsoft, but at the end of the day he's a strong CEO of a massive multifaceted corporation. I don't think he's strategically positioning against Microsoft. He's making a decision based on the best interest of shareholders. Hopefully, he's also considering the best interest of AOL and its users. I don't see this as a game of chess where he's strategically pitting to weaken Microsoft in the long run.
Q: What would AOL/Yahoo look like in the future?
A: I knew what the future AOL would be about a year and a half ago under Miller's rein as it moved to an ad-based platform. AOL is a company that owns and operates product, content and services, along with a third-party ad network it monetizes, and that's a healthy mix. It's Google's mix. It's Yahoo's mix. It's Microsoft's mix. Everyone knows the future is far from dial-up services.
If AOL and Yahoo come together, it would have substantial user reach and top-tier products, and a giant safe advertising network for the leading brands in the world, which ironically are similar to AOL's and Yahoo's independent missions. It gives them a bigger bouquet to work with--all those products under one roof.
Q: Are the platforms that run these ad networks compatible?
A: I haven't looked at it that closely, but I assume it will be a very difficult integration. You're taking two--probably the largest--Web software entities that exist today. Both have gigantic authentication systems and ad network platforms. There are obvious things that would remain--for example, the AIM brand is so insanely strong that it makes sense for instant messaging to come together on that platform. Yahoo Messenger and AIM both have a substantial amount of users. On the other hand, it can't be easily argued that one company is so technically dominant over the other that you should always migrate to their platform. It's not going to be an obvious integration.