At least one Internet titan is rooting for Microsoft in its bid for Yahoo: Barry Diller. The IAC chief told analysts he sees big upside for Ask of Microsoft succeeds, or if the process is drawn out for any length of time.
First off, Microsoft-Yahoo creates a viable alternative to Google in online search, which Barry says helps Ask:
It is very difficult to compete with Google on distribution or be anyone’s partner other than Google in online advertising. We had extensive conversations over the past year with both Microsoft and Yahoo, both of whom were very desirous of Ask’s business, but they did not have the ability to bid for us. I think that if they combined they would have.
[Important to note what Barry means here: Ask might be able to drive a harder bargain–in terms of revenue share–with its search monetization partner thanks to the existence of a viable alternative].
Second, the bid destabilizes both Microsoft and Yahoo whether or not it is ultimately successful:
If [the deal] happens there will be at least a couple years of integration challenges. I doubt many people at Yahoo can concentrate fully on innovation right now and there will be upheavals at Microsoft. This gives us an advantage. As long as we continue to innovate and there are two strong competitors, then this is good for Ask.
Translation? Deal purgatory. We’re with Barry 100% on that one. Whether or not the transition is good for Ask, it will almost certainly be bad for Microsoft and Yahoo.
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