Contentinople - Frank Smith - News Bits: How to Scale a Yahoo

Written by Frank Smith

Friday, May 2. 2008 at 11:15 AM EDT 1 comment

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While Microsoft Corp. (Nasdaq: MSFT) mulls its decision to go after Yahoo Inc. (Nasdaq: YHOO) in a hostile takeover bid, Yahoo could soon make an announcement about its experiment to carry Google (Nasdaq: GOOG) search ads.

Carrying the ads could boost Yahoo's cash flow and back up the company's claim that it is worth more than Microsoft has bid for it.

To avoid antitrust scrutiny, Google and Yahoo say they will include a non-exclusive arrangement to satisfy regulators.

On the Google-Yahoo ad deal, an auction platform would select the most lucrative ads for searches by Yahoo or Google (and their competitors). This auction system would make it so that Microsoft could connect to the system and have search ads it sold appear alongside Yahoo search results.

Ad revenues would be shared all around.

According to Microsoft CEO Steve Ballmer, Yahoo doesn't have the scale to pull something like this off. Also, he claims that Microsoft can build a competitive ad business without purchasing Yahoo, but it would take more time.

In other news:

ABC Inc. is considering a new ad strategy where the network will experiment with adding multiple commercials into ad breaks for prime-time shows on its online video player. Gosh, remember when you used to get work done on a computer rather than watch TV?

Hulu LLC has launched a channel on YouTube Inc. to promote its content with three- to five-minute clips of Fox Broadcasting Co. and NBC Universal programming. Run as fast as you can, but you can't escape YouTube.

Tags: ABC, Advertising, Business, Fox, Hulu, Microsoft, NBC, Services, Technology, Video, Yahoo

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Off to hulu for me then.
Eve Bergazyn
Rank: Caliph
Friday May 2, 2008 3:12:09 PM

no ratings

I guess that means the ABC honeymoon is over. I'd rather watch shows anywhere else than watch a show broken up by a few several-commercial long breaks. Sounds like plain-old TV before TiVo.

So they're not making enough off of the one-commercial breaks, it seems.

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