Live Blogging Microsoft’s Bid For Yahoo Call

The Microsoft conference
call on the Yahoo bid is happening now. I’ll live blog rough notes. Greg
Sterling will do a formal write-up later.

Steve Ballmer

• Had conversations over past 18 months.
• Called Jerry Yang to discuss yesterday

Kevin Johnson

• Online advertising is growing
• Scale economics helps
• Technology matters in the space
• Because of both, there’s consolidation
• One player dominates (Google; he doesn’t say that)
• Combining will give a more "credible" competitor
• Combining talent pools, two search indexes, two ad platforms
• Will enhance user experiences, innovation, better value for customers (see
  FTC, consumers win!)
• Combining search and non-search in a single platform will improve
  revenues, make life easier for everyone
• Pluses in eliminating redundant jobs and efforts, the fourth synergy in
  all this
• Have a clear integration plan (can’t wait to hear it)
• Based on success integrating aQuantive and TellMe (neither of which
  approach an integration of the size of Yahoo)

Ray
Ozzie

• Portals led the way (think he said that, and if so, they didn’t)
• Search becomes important
• Search will grow past 10 blue links (thank Ask’s Jim Lanzone for
  popularizing this notion)
• Natural language will come (yeah, right)
• Yahoo has great community assets, combined with Microsoft productivity
  apps and devices, things will be great
• So excited!

Chris
Liddell

• Restates offer terms, says second half of 2008, hope to close
• Real opportunity is long term values

Questions

• To Ballmer, why this after aQuantive. No consumer face to that. No better
  way to increase scale and capacity than this.
   
• Johnson reiterates that scale matters, you can ramp up ads if search,
  non-search, behavioral all on the same platform.
   
• What makes this a more competitive offer than other potential media buyers
  that might be out there? Liddell: believe it’s an attractive one.
  Brad
  Smith says that since Google has 75 percent marketshare worldwide on paid
  search, they aren’t in a position to do this, anti-trust laws would prevent
  them.
   
• How do you stop Yahoo from losing marketshare, asks analyst (dude, Yahoo
  isn’t — Microsoft is). Kevin comes back to combining engineering to be more
  efficient and drive core relevancy (which Yahoo is already competitive with in
  terms of Google, so that’s not a convincing answer).
   
• Why not expand R&D rather than integrate two companies with different
  cultures? Is that risk accounted for. Ballmer — nothing like putting together
  two larger sophisticated R&D operations (or a nightmare). "It should be quite
  an accelerant." (or a hindrance, could go either way).
   
• Hoping I’ll get to ask which brand will survive in search, which ad
  platform will make it, and more actual details on this plan. Damn, last
  question.
   
• Ah, asked about existing brands. The Yahoo brand is a great brand. We love
  the Yahoo brand. They want to have clear integration principals and leaders
  from both company and lots of synergy (and corporate feel good talk). Ballmer:
  the Windows user wants to be live. There will be a Windows Live (’cause the
  demand has proven how much that’s been demanded so far, not). We have some
  thoughts… but a team from both companies would be best to assess that.

End of call.

Bottom line. There’s a plan Microsoft has in mind, but it sounds like
it has to be developed a lot more, especially when Microsoft itself says it
doesn’t have answers until it works with Yahoo. Frankly, this sounds far from an
easy win for Microsoft, especially after having now put Yahoo into play, there
are good arguments it could stay a strong company and not suffer brand
confusion. But there are compelling reason, obviously, why the two combined
would be the best challenger to Google.

For more on the Microsoft bid for Yahoo, also see our other coverage:

• Microsoft Makes
  $45 Billion Bid To Buy Yahoo
• Microsoft Call:
  "We Love The Yahoo Brand" [But Can The Deal Happen?]
• MSFT + YHOO: What
  Would Microsoft Yahoo Look Like?
• Q&A With Microsoft
  On Proposed Yahoo Purchase: 2+2 = #1
• Microsoft + Yahoo:
  Recapping Reactions

Also see discussion from across the web on

Blogrunner and
Techmeme.