Kara Swisher

Recent Posts by Kara Swisher

Look Out, Yahoo–Microsoft Is Aiming at Google and May Hit You Instead!

Please see this disclosure related to me and Google.

They say that only the grass gets trampled when elephants fight. And that grass might actually turn out to be Yahoo in the epic battle between Microsoft and Google.

elephants

While the New York Times spilled a lot of ink earlier this week in a very long piece about that massive mano-a-mano, the true fallout in the online ad space, at least, could be more painful for the No. 2 player–Yahoo–which sits smack in between No. 1 Google and No. 3 Microsoft.

Yesterday, that was clearly in evidence in a kind of round-tripping ad deal Microsoft struck with Viacom, a five-year strategic partnership that was valued at $500 million by the two parties.

It’s pretty simple, really. Microsoft dips into its massive cash coffers and buys ads on Viacom’s many online and offline media outlets and it also licenses Viacom content–from places like MTV and Comedy Central–for its online MSN and Xbox 360 services.

Viacom scores!

For that, Viacom has agreed to use Microsoft’s digital ad-serving technology and also will let it sell some of its display ads on its–who knew?–300 Web sites. (Of course, Microsoft handed Viacom yet another one of those economically unsound guaranteed ad deals that both it and Google are so fond of doing these days.)

Viacom scores again!

Naturally, Google was not in the competitive mix, given Viacom is suing its YouTube unit for $1 billion over copyright-infringement issues.

And Viacom also got to smack Google again, since it dumped DoubleClick–the online ad network that Google is in the midst of acquiring–and replace it with Microsoft’s Atlas service (which the software giant picked up in its recent purchase of aQuantive).

Yep. Viacom. Scores. Yet Again. (Except the Microsoft-Viacom deal probably has now provided Google with some air cover about complaints–leveled by Microsoft to government regulators–that it had a dangerous monopoly over online advertising with its DoubleClick purchase, which means it is more likely to be approved now.)

While this is all very clash-of-the-titans, with most of the benefit accruing to Viacom, one has to wonder where this leaves Yahoo–considered the longest-standing and doubtlessly most experienced seller of display ads–in this war.

Viacom did pick Yahoo to manage its search-ad business earlier this year, and this deal with Microsoft will not impact that.

But Yahoo’s game in the future is not in the monetization of search, which Google dominates, but in turbocharging its graphical and video ad business, an area in which it has the best shot at differentiating itself. It should have been in this fight, but it was not mentioned once.

And watching Viacom work the Microsoft-Google Cold War, it feels a lot like what Facebook did recently when it expertly played the bickering pair against each other over its financing and the right to sells its international ads.

Given Yahoo keeps losing in this kind of warmongering (to be fair, it can’t even contemplate competing in what will surely turn insane), you almost want Yahoo CEO Jerry Yang to get while the getting is good and auction off his company’s crown jewel–its search monetization business–to the highest bidder.

If that was the case, if Yang was bold enough to do it and willing to swallow a little pride, I would think we haven’t nearly begun to see just how high both Google and Microsoft can bid.


Latest Video

View all videos »

Search »

The problem with the Billionaire Savior phase of the newspaper collapse has always been that billionaires don’t tend to like the kind of authority-questioning journalism that upsets the status quo.

— Ryan Chittum, writing in the Columbia Journalism Review about the promise of Pierre Omidyar’s new media venture with Glenn Greenwald