Analysis: What a combined MSN-Yahoo! would Look Like

A combination of Yahoo and Microsoft Network, through the planned purchase of Yahoo by Microsoft is still likely (even though the $44.6 billion bid was formally rebuffed on Monday by Yahoo’s board). The acquisition would have important implications for the U.S. Hispanic and Latin American online media markets, and those implications are explored below in a series of questions pivotal to such a move.

What are the market shares of Microsoft and Yahoo, and their main competitor Google, in the Latin American and U.S. Hispanic markets?

Google, commands at least 90% of the search market in most Latin American countries, a higher share than it has in the U.S. and in Europe. Yahoo and Microsoft are among the players, that also include some local companies, who have the remaining 10% market share.

However, when it comes to online display advertising, things are different. “Without a doubt, MSN has a long track-record for online display ads, primarily in Latin America. Some top senior management players that now work for Google and Yahoo! came from MSN. Yahoo! caught up early in the game for market share and became a major success,” Nacho Hernandez, founder and CEO of San Diego-based iHispanic Marketing Group, tells Portada.

Hernandez adds that for Google, all its efforts have been on search text-based ads through its Google Adwords platform and has reached the highest level of acceptance in Latin America to gain total domination in upwards of 70 to 90% market share in most major markets.

In the U.S., Hernandez says, all three companies have adopted a strategy of creating smaller teams under their own individual corporate staffing to encompass deals with the big players such as Univision Online, Telemundo and AOL Latino, among several other important portals. Some of these deals are to increase display ad inventory, others for search ads.

Would a Yahoo-MSN Latino be good or bad for competition in the U.S. Hispanic market?

iHispanic Marketing Group’s Hernandez sees the US Hispanic market gaining more immediate benefits from a merger between Microsoft and Yahoo!. “This is primarily because, most marketing managers are comfortable with English-language based advertising platforms to achieve getting their campaigns across the vast array of networks where consumers live and breath online activity.”

… and what about Latin America?

Another observer of the Hispanic and Latin American digital media marketspace tells Portada that while Google has an excellent product, its service may not be as good, particularly for smaller advertisers. In addition, Microsoft Network (MSN) is a leader in online display advertising in Brazil and Mexico. By combining Yahoo’s sales structure and MSN’s strength in some of these markets, competition against Google is bound to increase and this can be good for consumers. According to Nacho Hernandez, “It will be Latin America, which will hold an interesting twist. Whatever happens, consumers, advertising clients and businesses will see an enhancement of their well-being to routine activities. Competition is a good thing! Let's just see what happens next.”

Will the teams of MSN and Yahoo be able to work well together?

“In my opinion, all three companies have outstanding leaders taking full force in establishing each of their brands as a medium of choice for reaching consumers through online advertising efforts,” says Hernandez. “All three, in a way, have also worked closely together to set standards and educate advertisers through their local Internet organizations and IAB local chapters. Today, these three leaders are: Gonzalo Alonso, General Manager for Spanish-Speaking Latin America, Google, Inc.; Rafael Jiménez, General Manager, Advertising and Publisher Group, Yahoo! Hispanic Americas; and María Teresa Arnal, General Manger to Prodigy MSN. Each have created teams across all markets that continue to accomplish the same goal. However, each also have higher senior management that they must report to in order to gain market share from the products they have to offer. I personally believe that Rafael Jimenez and Mariate Arnal together would create amazing synergies.

Is it too late to catch up to Google’s hegemony?

According to Hernandez, “Yahoo! might still be no match to Gonzalo Alonso and Google's product suite, which has favorable approval from small businesses to large corporations, as well as governments and the educational systems. Whether they're seeking an advertising platform or ways to make their business more productive, Google has solutions that have been translated to Spanish since early on in the product development phase to gain a faster response. When it comes to Yahoo!'s new Panama implementation or Microsoft's Adcenter, it may just be too late, and any merger would make it just more difficult to gain traction any time soon. But when it does gain traction, you can bet that both Microsoft's business products and Yahoo!'s advertising platform combined will bring amazing capabilities.”

Related Article: Jan 15, 2008. Trends in Latin American Online Advertising


Trackback from your site.

Editorial Staff

Portada Staff

MORE FROM PORTADA

BRAND MARKETING RESEARCH: 41% of Consumers Have Switched Brands Due to Poor Personalization

BRAND MARKETING RESEARCH: 41% of Consumers Have Switched Brands Due to Poor Personalization

A summary of the most exciting recent research in brand marketing in the U.S., U.S.-Hispanic and Latin American markets. If you're trying to keep up, consider this your one-stop shop.


Hispanic Mobile Network AdsMovil Provides Advertisers with Viable Alternative to Duopoly

Hispanic Mobile Network AdsMovil Provides Advertisers with Viable Alternative to Duopoly

Could Adsmovil be the long-awaited viable alternative to the Facebook/Google duopoly?


Meredith Corporation Buys Time Inc. for US$2.8 billion

Meredith Corporation Buys Time Inc. for US$2.8 billion

Meredith Corporation has entered into a binding agreement to acquire all outstanding shares of Time Inc. for US$18.50 per share in an all-cash transaction valued at us$2.8 billion.Meredith adds leading media brands to already strong portfolio of National and Local Media Properties, creating media powerhouse with US$4.8 Billion in Revenues, Including US$2.7 billion of advertising revenues.