Analysis: What a Microsoft/Yahoo combination would mean for the Latin markets- Part 1

Will Microsoft buy Yahoo? And what would the impact on the U.S. Hispanic and Latin American markets of a combined Yahoo!-Microsoft giant be? Well, this is not the first time Portada’s editorial team is dealing with such a hypothesis, in February 2008 we looked at the “Latin” consequences of a potential Yahoo-Microsoft combination. As Christopher Stanley, CEO of Alcance Media Group tells us “this has been an ongoing saga of who is or is not interested in buying Yahoo, I am taking a wait and see approach.” However, the analysis of a potential combination is not only very important in its own right, but it also highlights the competitive structure of the U.S. Hispanic and Latin American digital media markets.  

Below are the main conclusions we came up with in Q&A form:

There are many interested parties in buying Yahoo  ….

Yes, as Business Insider reports there are many bidders and possible outcomes in a potential Yahoo sale. Quite a few of them involve some Microsoft participation.

Why is Microsoft interested?

The number one priority for Microsoft’s online business effort is search. As Business Insider points out “A huge part of Microsoft's steady (costly) market share growth in search has been its partnership to power Yahoo search. Microsoft needs Yahoo to remain a healthy company that has an online product that continues to attract hundreds of millions of users. It will happily join an investment in the company to make sure that happens.”

Jose Ruiz, Director, Latin America Advertising & Online, at Oracle tells Portada that “buying Yahoo! makes strategic sense for Microsoft.  Google dominates the web search market and neither Yahoo! nor Microsoft can compete alone against Google. It's all about critical mass; this possible acquisition could put Microsoft in a good position to challenge Google on the web search market.” “It makes sense for Microsoft to acquire Yahoo. Not only are they already collaborating at the operational level, both are desperately trying to keep Google at bay “, says TonyD’Andrea, Director of Planning and Research  The San Jose Group in Chicago.

What are the implications for the Latin American market?

According to the ComSocre rankings for September 2011, Microsoft Sites have 114.494 million uniques users versus Yahoo´s 86.257 million uniques in Latin America. The total internet audience in LatAm is 124.492 million users and Microsoft Sites are in the second place behind Google sites with 119 million uniques users.

Both sites together (Yahoo! and Microsoft) have 200.7 million uniques lthough the real number is substantially lower as both properties audiences overlap substantially.In any case, the combined Microsoft and Yahoo audience would be substantially larger than the Google audience which is currently leading the ranking in the region.

Tomorrow part 2: The bottom line: The impact a Yahoo – Microsoft combination would  have on Latin America and on both organizations.


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Editorial Staff @portada_online

Portada Staff

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