Rant About It

Archive for the ‘Yahoo’ Category

Will Facebook Bite The Dust

Posted by rantaboutit on February 14, 2007

Facebook is a social networking website popular with teenagers. It is ranked 7th most visited site in U.S. with 2.3 million photos uploaded daily by the members. That sure is an amazing figure. Like MySpace, Facebook is a potential buyout target for the big guns. But surprizingly Facebook has rejected any offer thrown at them which also includes the offer from Yahoo YHOO for $900 million. Makes one wonder why are they being so silly ? Or maybe not. Let us dig deep.


Facebook & Comcast Deal

Facebook announced a deal with Comcast CMCSA last week. As part of the deal, registered Facebook members can upload, share and rate the videos on Comcast’s video-sharing web site called Ziddio. These videos will also be available on Comcast’s ON DEMAND service. Few of the best videos will make it to the television series. This deal will increase the sign ups at Facebook and generate more traffic. For Comcast, the revenue will come from selling advertisements for videos and pay per view charges.

Facebook & Jobster Deal
There is also a possibility that Facebook will hook up with Jobster. As part of the deal Facebook members can post jobs, create their own profile and tag their skillsets. Additionally members can have referrals from current employees. This definitely is a cool way to show off your profile, which can help hiring managers cross-check the accountability of the person they are hiring. Again with this deal, there will be a spike in the sign-ups at Facebook and Jobster which is obviously beneficial to both companies.

Positives

  1. When Yahoo made an offer to Facebook, within hours Facebook users created hundreds of groups, protesting against the possible acquisition. This is an indication of its loyal community. According to Facebook spokesman members spend an average of 18 minutes a day on the site.
  2. Their approach to product planning and feature enhancements has made Facebook users certain of one thing that it’s all about communications. Too many competing social networks are moving away from that core. (Source: GigaOm)
  3. Facebook has been actively signing up deals with other affliated sites to generate traffic and keep their members hooked up for more to come.

Negatives

  1. Generating revenue is always a challenge. Their expected sales is not generating as much revenue as planned before.
  2. There is too much competition.
  3. Facebook advertisers have gone home disappointed of lately.
  4. Teenagers are always on the look for cool products and features. If Facebook cannot keep up with those demands, they might not be a dominant force in the world of social networking.
Conclusion: This year will be an interesting year for Facebook. If they can generate revenue from their online traffic, they can turn into a house-hold or should i say a dorm brand. Each and every teenager would be hooked up on it. However if they cannot capitalize on this traffic we are looking at a potential buyout. Unfortunately for Facebook I doubt if Yahoo will make the same juicy offer again and they might have to settle for much less.

Recommendation: Buying out Facebook would be the best thing that can happen to Yahoo. This would mean that with Flickr and Facebook, Yahoo would be ranked #1 in terms of the number of photos uploaded daily and eventually it means more traffic and more revenue from advertisements.

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Posted in Technology, Traffic, Yahoo | Leave a Comment »

Does Google really love MySpace ?

Posted by rantaboutit on February 9, 2007

MySpace.com was founded in 2003 and bought in July 2005 by Rupert Murdoch’s News Corp. NWS.

For those of you who do not know about MySpace, here is a quick introduction from Wikipedia.org

MySpace.com is a social networking website offering an interactive, user-submitted network of friends, personal profiles, blogs, groups, photos, music and videos. MySpace also features an internal search engine and an internal email system. It is currently the third most popular website in the U.S. They crossed 100 million accounts in August 2006, with a news story claiming the site attracts new registrations at 230,000/day.

Google-MySpace Deal 2006
This kind of website is definitely going to attract attention from the big boys like Google GOOG, Yahoo YHOO Microsoft MSFT and eBay EBAY. Google struck a $900 million advertising deal with MySpace 6 months back. Google wants to provide Google search tools on MySpace and run Google ads. This will benefit Google by allowing them to promote themselves and their advertisers to a huge community. In return Google will pay News Corp, $900 million in ad revenue over the next 3 years. Win-win for both !! But there is more…

Roadblock
Before the Google deal goes through, MySpace wants to strike some more deals, especially with eBay. Now this would be a cool feature for MySpace users. This deal would allow MySpace users to buy and sell products. Additionally eBay’s payment system PayPal would become the means for payments. This will benefit eBay generate more revenue from the merchandize sale and payment processing fee. In return MySpace can expect a big chunk of revenue.

Google-MySpace Deal 2007
Obviously Google is not happy with the eBay-MySpace deal. Google’s listing service Google Base and their recently introduced payment service GCheckout will take a hit. Add to that Google has realized that people looking up different profiles dont really care about clicking the ads and therefore is not turning out to be a good source of revenue. So what does Google do now ? They will be renegotiating terms of their deal with News Corp. Meanwhile, MySpace has grown in audience and will be looking for more cash. This one is going to be tricky from both ends. That said, I am sure Google will not completely blow off the deal since it will keep competitors like Yahoo and Microsoft at bay.

Recommendation: Keep close eye on how the deal folds. This would affect the way these big boys do busines in the next year or two.

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Posted in Ebay, Google, Technology, Yahoo | 1 Comment »

Yahoo and the Panama buzz !!

Posted by rantaboutit on January 25, 2007

The latest buzz around Yahoo YHOO is about their new Ad Ranking System called Panama. Currently Yahoo places a paid ad solely based on the amount you are willing to pay for the keyword, whereas Google GOOG uses both price of the keyword and a quality score to rank the ad. Yahoo is looking to rectify this with Panama. Shareholders, employees and advertisers are for obvious reasons, praying that Panama works. Positive comments and publicity are all good, but unless the system helps generate more revenue it means nothing, especially to the investors.
The company began to transition customers to Panama in mid-Q4, any revenue growth will likely come in Q1 at the earliest. The question to ask is whether this transition is going to have a positive or negative impact on their Q4 or Q1 revenue. If it is going to be negative, Google will gain on it.

According to Wall Street Journal, some small Yahoo customers have had to cut back spending significantly during the transition. Some mid-size companies were spending $10,000 to $15,000 a month on search-related advertising through Yahoo. After their account was transition, Yahoo declined to let them continue running some ads linked to specific keywords. In response these companies slashed their spending on Yahoo and increase their spending with Google.

Conclusion: For now, Google seems to gain with their existing system. Yahoo in this transition phase might lose out some revenue, and if they are not too careful might lose out on some loyal customers too.

Recommendation: I love both Google and Yahoo and see brighter future for both of them. The advertising pie is big enough for both. Google investors can enjoy steady rise in their stock prices, where as Yahoo investors might see light at the end of the tunnel after a wait for another qtr or two.

Posted in Google, Industry News, Technology, Yahoo | Leave a Comment »