Forget Star Wars, Search Engine Marketing (SEM) is feeling the force of the “Ad Wars”. As I mentioned in my last blog post Google recently brought DoubleClick Inc, an Internet advertising Solutions Company, so that they would have a better vehicle for selling display ads. In response to this Microsoft strengthened its armoury in search advertising by purchasing aQuantive, the parent company to Avenue A, Razorfish, Atlas and DRIVEpm, for $6 billion.
Now Yahoo has exposed their hand and unveiled their new move in the search advertising industry. Yahoo’s "Apex" project called AMP! is a new advertising management platform to rival Google and Microsoft in search advertising. Yahoo state that AMP! has been designed to streamline and automate online advertising across a variety of target markets, publishers and ad type. The advertising management platform will feature an open API and will include Yahoo! owned-and-operated inventory and more than 600 US newspapers in their Newspaper Consortium.
In a statement Hilary Schneider, Yahoo! EVP of Global Partner Solutions, announced that "While online advertising grows more sophisticated, the process of doing business today is surprisingly cumbersome and manual," He believes that the AMP! Platform will help remedy this because it can deliver a faster, easier, and more automated and integrated way to create, buy, and sell advertising.
This new advertising platform is still several months away from being released for the general public to use, but Yahoo aims to go live with this new advertising platform by the third quarter of this year. Now Yahoo has invested significantly in the AMP! platform technology so it will be interesting to see if they can deliver on their promise to overcome the inefficiencies that they currently say are constraining the online advertising industry. Let’s see if they really have produced an advertising platform that, in their own words, is “faster, easier, and more automated”.
I personally think the exposure of their new advertising management platform is a strategic and well timed move to help put pressure on Microsoft to up their bid for Yahoo. This is because this new announced about their advertising management platform comes in the wake of Microsoft's ultimatum that they have a deadline of three weeks to decide whether to accept their $41 billion takeover bid. Microsoft has warned Yahoo that if a deal hasn’t been reached by April 26 2008 then they would launch a hostile takeover at a lower price.
In an official letter to Steve Ballmer, Chief Executive Officer of Microsoft Corporation, the board of directors at Yahoo wrote; “Our Board has reviewed your most recent letter with regard to the unsolicited proposal you made to acquire Yahoo! on January 31, 2008. Our Board carefully considered your unsolicited proposal, unanimously concluded that it was not in the best interests of Yahoo! and our stockholders, and rejected it publicly on February 11, 2008. Our Board cited Yahoo's global brand, large worldwide audience, significant recent investments in advertising platforms and future growth prospects, free cash flow and earnings potential, as well as its substantial unconsolidated investments, as factors in its decision.”
However the letter does than go on to say “At the same time, we have continued to make clear that we are not opposed to a transaction with Microsoft if it is in the best interests of our stockholders. Our position is simply that any transaction must be at a value that fully reflects the value of Yahoo!, including any strategic benefits to Microsoft, and on terms that provide certainty to our stockholders.” So it is clear that Yahoo is not opposed to the takeover bid! Their letter clearly expresses that Microsoft have simply not offered what they feel reflects the true value of their company. In the letter they seem to have also made sure that Microsoft are aware of their new investments into advertising platforms in fact they deemed it a “significant” investment.
Can you now see why I’m suspicious of this sudden and timely launch of this new advertising platform? To me it just seems as if Yahoo are now just simply getting out the best china and cutlery and generally pulling out all the stops to hopefully get a better bid price out of Microsoft. However I could be wrong, Yahoo could simply be trying to boost the public’s confidence in their Search Engine to show that they are still a heavy weight contender in the Search Engine and Search Advertising industries and have nothing to fear from the likes of Microsoft.
Well either way we do not have long to wait! It will be interesting to see what move Microsoft now makes if Yahoo does not meet their three week deadline. Will they be impressed enough by Yahoo’s best efforts and dig deeper into their pockets? Or will they tighten the purse strings and become hostile towards them. What will be the next episode in the Ad Wars? I wait with bated breath!
