If Yahoo is really seriously pondering on entering in a deal with Microsoft, it better heed the result of a Jefferies analyst’s findings regarding a possible search outsourcing deal with Microsoft. By running the numbers on Yahoo’s potential search/display ad deal with Microsoft, the Jefferies analyst found out that outsourcing its search infratrusture to Microsoft would save Yahoo $1 to S1.3 billion per year. And if Yahoo and Microsoft would agree on a 50/50 revenue share for displaying Yahoo ads on Microsoft’s online property, Yahoo will most likely earn around $600 million to $800 million in annual revenue.
And applying some basic mathematics to those numbers, outsourcing its search infrastructure to Microsoft would yield a combined savings/revenue figure of $1.6 billion to $1.2 billion annually for Yahoo.
If this materialize, it would be a good addition to Yahoo’s current revenue of $5 billion a year. But then again, who knows what the final deal between Yahoo and Microsoft would be? For all we know, this might end up in a similar fashion as last year’s Yahoo-Microsoft deal, right?
It may save money but wont the control be taken away?
They would lose market share faster than you could say “I told you so”.
Combining the advertising platforms would be a good deal for everyone involved.
Combining the core search technologies would be disastrous.
If Yahoo Outsource to MS then it will surely lose it’s originality. Think of Y! it’s bad situation :(