Why WPP should NOT buy Yahoo
January 15, 2010
This is in response to the Paid Content report titled “Why Yahoo Should Buy WPP”.
The fundamental problems with this are astronomical, but let’s take things one at a time. A marriage like won’t make sense to either company for the simple fact is what would advertising agency WPP group plc do with Yahoo?
WPP doesn’t have the technical knowledge to run an Internet portal like that, you’re talking about a holding company where more than 1/2 of their subsidiaries launch websites without meta tags. So in essence WPP would have to rely on Yahoo Engineers to keep things running and growing.
Then that leaves open a second question, does Yahoo know what it’s doing itself? It’s Market cap of $23.55 Billion is a fraction of Google that is currently at $183.84 Billion. Despite the fact that YAHOO CREATED GOOGLE. That’s correct people, almost exactly 10 years ago Yahoo adopted Google Results in their search engine, forcing their advertising loaded website to display Google Results. Within months users found out that they could see a non-ad filled page with the same results. What do you think consumers did? Yahoo ended the relationship a few years later when they came to realisation that they are growing a competitor.
So exactly what could WPP bring to the table that Yahoo! can’t do on their own? Well the problem is nothing. See most clients don’t really care about Yahoo in terms of advertising dollars. They DO care about Google. So WPP owning Yahoo and then all of a sudden pushing their clients to spend their pay per click dollars and display ads on Yahoo as compared to Google Adwords will look far more than just dishonest… it will most likely destroy their clients ROI.
“We’re going to allocate 85% of your budget to Yahoo display ads” — WPP
“Huh?” — Client
Perhaps I was wrong, WPP should buy Yahoo. For a firm like mine it would mean even more clients.
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