Image via CrunchBase, source unknown
Start with email. Even though GMail is growing quickly, Yahoo! still has a ton of email customers. Add those to Microsoft's Live email, and the combined market share of these two email platforms is on the order of 80%. That's a lot of captive desktop time where ads could be shown - if Microhoo can maintain that market share.
Then there's portal traffic. Yahoo's home page is a landing spot for a lot of users, and I have a hunch that these are users in the most stable demographics on the web. All of those eyes are a valuable asset, not just for selling ads, but to serve as a launching pad for new initiatives. Check out this article on readwriteweb where they talk about the impact of a recently-launched feature called "Buzzing Now". According to the article,
- Yahoo.com has sent approximately 16 million total referrals to just a subset of the publishers in the beta during the first two weeks via “Buzzing Now” links in the Featured section of the homepage.
- Salon.com reached over 1 million uniques in one day for the first time in the company's 12-year history, after Yahoo.com linked to one of their highly "buzzed" stories.
- US Magazine: Referral visits from the Yahoo! homepage accounted for 32% of total visits that day.
Go read the article - there are more traffic numbers there. My point is that when Yahoo! still has the eyeballs and the clout to swing traffic like this, they're a jewel worth getting excited about.
Of course, Microsoft would have their work cut out for them. The mere fact that despite all this traffic, Yahoo's financials have lagged expectations begs the question of how Microsoft could improve on that performance. There's also the issue of culture.
Detractors of the Microhoo deal believe that Yahoo's open culture is going to clash mightily with Microsoft's, but I think they're wrong. I've seen a big change in Microsoft over the last few months. There's a greater embrace of openness than they've ever shown, and it's taking root and flourishing. Microsoft is ready for Yahoo's sort of culture, and I really think there are parts of Yahoo! that could stand a little infusion of Ballmer's enthusiasm - maybe even a swift kick. This could be a pretty cool partnership.