Yahoo and Facebook

What to make of the new tie-up between Yahoo and Facebook?

Yahoo’s worry is that its users are increasingly using Facebook, and may decide to defect altogether. This deal allows them instead to update their Facebook page at the tick of a box, so that they don’t have to go back and forth between both networks. The cross-pollination is good for both companies. And the ability for users to control social media sharing from one page is also good for advertisers, as it vastly increases the potential audience.

At first glance, it looks like an Internet has-been making up to the popular newcomer to avoid being edged out altogether. Yahoo’s glory days as a search engine are long gone, and it had to lay off more than a thousand employees a couple of years ago. This could further weaken its brand.

But Yahoo is still the most profitable Internet company in the world, receiving around 1.5 billion visitors to its main portal. It’s also the online advertising giant, owning by far the largest slice of display advertising (17% compared with Microsoft’s 11%).

So the jostling among the giants goes on. Having tried to buy Facebook a few years back, Yahoo fought off a bid by Microsoft, and is now itself thought likely to be vulnerable to a bid from Facebook in the not too distant future.

Leave a comment