Yahoo Buyout Rumor – this one is real


The faulty Times of London rumor over the weekend about a pending major Yahoo search deal with Microsoft was likely spawned in part by what appear to be correct reports that Jonathan Miller, former CEO of AOL, has been working to pull together at deal that would value Yahoo in the $20-$22 per share range and lead to a takeover of the company, presumably the deal would put Miller in a key role.

Jessica V at Wall Street Journal Reports

Miller’s interesting history as an AOL innovator and corporate rescue man who was fired after what many think were successful actions suggests to me that he’s eyeing Yahoo as a way to get back in the internet saddle in a major way.    Yahoo’s internet footprint remains *larger than Google’s*, yet Yahoo’s legendarily inept monetization of this online traffic has let Google leave them in the revenue dust.    As a company Yahoo is a lean shadow of its former self, but as an internet empire they are still doing just fine.   One caveat is that Yahoo continues to lag Google big time in the most lucrative online activity of search.   However, as one of a handful of global website empires that can shape user behavior simply by adjusting their offerings, advertising, and navigation elements Yahoo optimists like me continue to think that Yahoo’s problems can be fixed, leaving them in a position to double revenues in short order.    They do not have to match Google’s revenues or monetization to be wildly successful – they just need to *do somewhat better than they do now*.   I’m betting they can.

Disclosure: Long on Yahoo (in fact I just bought more today)

Microsoft to Aquire Yahoo Search for 20 Billion… or not?


While the Times of London is reporting that Microsoft is close to announcing a Yahoo search aquisition at 20 billion with a slew of details suggesting they have a lot of inside information, Venture Beat is suggesting this might be a bogus report as they’ve been told by a key player in the deal, Ross Levinsohn, that he knows nothing of this.   Although it’s possible Levinsohn is … covering for the deal it seems odd he’d issue a flat denial if there was something to the rumors.

My wild guess is that the Times had a hot tip about one of the dozens of potential deals that are surely percolating around Yahoo as the stock (and thus buyout value) dips to very low levels, and that they ran with it rather than spend much time researching.   This has become a major pitfall of “real time” media, where there is increasing pressure to shoot first and hope your story is correct later.   Another possibility is that this is a carefully contrived rumor to pump and dump the stock on Monday – without more denials this is likely to spike Yahoo a few bucks or even more Monday morning.

Disclosure:  Long on Yahoo

AOL and Yahoo star in “Spawn of the Ugly Ducklings”


After Yahoo turned down Microsoft’s offer of over $31 per share there has not been much good news for a troubled Yahoo, with a price now right about *half* what Microsoft offered.   However it does appear that Yahoo will merge with another struggling internet empire:  AOL.    Time Warner’s merger with AOL years ago will probably go down as one of the most misguided corporate marriages in history leading as it did to nothing but heartaches and lowered TW values, but the Yahoo deal actually seems to make a lot of sense to me if Yahoo can get it’s management act in gear.   With AOL Yahoo will control even more valuable internet items such as about half of all the email accounts in the world.     Some reports suggest that Microsoft may have even more interest in a combined Yahoo AOL. In today’s challenged fiscal environment it seems unlikely Yahoo could refuse another MS takeover even at a reduced cost per share.

TechCrunch Reports

Disclosure:  Long on YHOO

SES San Jose – click fraud session


The intro talk by Tom Cuthbert is listing click fraud numbers that, at over 16% for overall and over 25% for content PPC, are dramatically higher than the few percent normally cited by Google. I’m anxious to hear Shuman’s take on this. Excellent slides…. will try to link them up later.

Erin Sheedy-Owen from Yahoo on catching fraudulent clicks. “We err on the side of the advertiser”. You’ll see these in your logs but won’t be charged for them.

Outright fraud vs Low converting vs unwanted clicks. 12-15% of the clicks are filtered and advertiser not charged. Large recent rise in bot fraud. (this was also noted by Cuthbert).

Yahoo goal is to respond to click fraud reports from advertisers within 10 days. Erin’s making the case that advertiser feedback is very important.

Waiting for Internet Advertising Bureau guidelines.

Deborah from Outrider, a Search Marketing agency managing 1.3 billion in search advertising.   [wow – wouldn’t this be approaching 10% of the market if it is annual? – I’m skeptical of this number’s relevance – maybe this is over a long period of time, though still….an impressive data set].

Client opinions vary from huge concern to little.

ClickForensics is their click fraud application.   Interesting – she just mentioned parked domains as a click fraud issue.  Traffic from a highly relevant parked domain name would probably be good.

Matt Greitzer from Razorfish: They manage 300 million per year in paid clicks.

Virtuous cycle of quality clicks [hmmm — IMHO the optimal revenue model for Google and Yahoo is probably not optimal for advertisers.
I don’t think folks understand this well yet and for agencies overbids are money in the bank too, but standards are coming too slowly because search profits will go down as standards go up.   That said, I have a lot of faith in the next speaker’s sincerity ]

Shuman Ghosemajumder from Google:

Google’s Proactive approach:   Filters – automated.  Invalid click reports available to check these out.    Less than 10% filtered this way.

Offline analyis – leads to credits to account.    Click quality adjustments.  Statistical anamolies.

Finally, reactive approach involves investigation and report.  Very, very tiny.  <.02% handled this way.

[yikes – so why were Cuthbert’s numbers so much higher?]

Smart pricing:  Google gets same ROI by adjusting cost per click according to conversion metrics – ie lower performing publishers command less PPC. [But how do they measure the conversions?]

Google Placement reports and other performanc metrics allow you to track your own campaigns with great precision.

Google competes on basis of ROI, so their incentive is to keep it high and kill fraud.

Check out some Boss Mashups


Yahoo BOSS is a promising development tool that allows you to access some very powerful features from the Yahoo toolbox.   TechCrunch features some of the best BOSS mashups to date today and also notes that the BOSS “Yuil” application that was quickly pulled together after the notoriously challenged Cuil search launch had to be taken down when Cuil’s legal team jumped on the mashup for copyright infringement.

Yahoo Shareholder non-meeting


Today Yahoo Shareholders are meeting in San Jose.   Or maybe we should say non-meeting since there are apparentely mostly empty chairs and uneaten pastry in a venue that was to hold 1000.

With shares now trading about $19 you’d think shareholders would be out in force with torches and pitchforks, but Yahoo management – at enormous cost to shareholders and the company – has kept the corporate raiders and Microsoft at bay partly by granting a newly sheepish Carl Icahn a seat on the board and two more seats.     Icahn noted last week that enough large shareholders were sticking with the current board, making it impossible for him to take over the company.     His plan was fairly simple – buy a lot of Yahoo and then sell the company to Microsoft at a huge profit.    As a shareholder I remain  *totally* confused as to why large shareholders were unwilling to support this move – the obvious choice in terms of maximizing shareholder value with minimum risk.

However with challenges come opportunities.  Yahoo at $19 is looking pretty ripe right now given that Microsoft offered $31 just months ago when Yahoo’s prospects were not significantly different than they are right now.    Either MS is horribly miscalculating Yahoo’s value, or the Market is underestimating that value.     Clearly the current board is convinced there is a lot more value, and in this at least I would agree with them.

It’ll be interesting to see how the rank and file Yahoo folks are feeling at SES San Jose in a few weeks.   SES is the biggest search conference of the year in the heart of Silicon Valley, and hundreds of Yahoo folks will be there.  It will be interesting to get a feel for the current morale challenges at the company.

Disclosure:   Long on YHOO.  Considering buying more.

Delicious.com is up! Everybody Yawns. Tagging is so … 2007!


OK, even though I really love the power of tagging things and think *auto tagging* will quickly becoming a cornerstone of how the world will effectively managing the maelstrom of web content effectively, I’m not really feeling the new launch  of Delicious – the site and application that in an important way is the grandfather –  which in web years that means you have at least passed out of drooling infancy – of content tagging.

What?   I have not even reviewed the new site or APIs?   Yes,  I’m blogging before enough thinking again  (sorry, Sarah Lacy!)

Delicious’ basic tagging idea is very good – users tag stuff and share tags with people and the main site then has a body of information that can be used to determine the sites most appropriate for various tags.     The challenge of course is that noboby much wants to spend that extra 10 seconds or so tagging stuff, unless of course you are a search engine optimizing person in which case you are going to be *far too willing* to tag stuff.   This disparity in tagging enthusiasm can easily distort the results, especially for popular commercial terms.   This is why I would argue that the best tagging is automatic or based on simple behavior observations rather than direct user feedback.    Google, MSN, Yahoo alll have this type of massive behavioral data stream and I want to see them process it to improve the search experience.   For example if, after millions of searches,  4 out of five people who do a lot of dental searches click to the site  “dentistry.com” and stay there for several minutes after a query for “dental information”, you can be fairly confident that the site is a good one for that query.    This is a simple equation but data can be processed in far more complex fashion to reveal a lot more about how others are searching and finding things.   Generally this will give us a lot of insights.

So, I’m hoping a lot of folks use Delicious and tag like crazy, but I’m not holding my breath…