Why IAC Needs MSN: Barry Diller, meet Bill Gates
Why would InterActive Corporation be a natural partner with MSN?
It's no secret that IAC had tried to partner with Google several years ago in order to control a major source of traffic. Barry Diller essentially wanted a deal similar to what AOL recently negotiated. The deal never happened.
The anxiety felt by IAC goes beyond traffic. Yahoo is a portal that competes on the same playgrounds as IAC: Travel, Dating, etc. IAC faced the reality every webmaster does, and that's the fiscal dependence upon a third party for traffic and revenue. Any business predicated on something as uncontrollable as an algo is as good as well... the next update. Uncertainty is not good.
So IAC purchased ASK in order to feed the different parts that form IAC. But ASK controls a tiny market share. AJ's market share is variously stated as between 2.6% to 7% (when counting Iwon.com, MyWay.com etc.). ASK clearly does not provide the traffic stability that an alliance with Google can deliver. So the quest for stability remains.
Enter the Dragon... from Redmond
IAC controls some of the webs most recognizable brands, including Match.com, Hotwire, Hotels.com, CitySearch, Evite, LendingTree, Ticketmaster, etc. But they are dependent on traffic. A partnership with MSN would deliver eyeballs in a mutually beneficial relationship. An IAC/MSN alliance makes sense because it MSN from becoming a Yahoo-like competitor down the road while feeding off of MSN's traffic. MSN receives ad dollars/commission.
Here's the Part that is Speculative but Plausible
How much sense would it make for Ask Jeeves to dump AdWords revenue and switch over to MSN AdCenter? What are the benefits?
It's no secret that IAC had tried to partner with Google several years ago in order to control a major source of traffic. Barry Diller essentially wanted a deal similar to what AOL recently negotiated. The deal never happened.
The anxiety felt by IAC goes beyond traffic. Yahoo is a portal that competes on the same playgrounds as IAC: Travel, Dating, etc. IAC faced the reality every webmaster does, and that's the fiscal dependence upon a third party for traffic and revenue. Any business predicated on something as uncontrollable as an algo is as good as well... the next update. Uncertainty is not good.
So IAC purchased ASK in order to feed the different parts that form IAC. But ASK controls a tiny market share. AJ's market share is variously stated as between 2.6% to 7% (when counting Iwon.com, MyWay.com etc.). ASK clearly does not provide the traffic stability that an alliance with Google can deliver. So the quest for stability remains.
Enter the Dragon... from Redmond
IAC controls some of the webs most recognizable brands, including Match.com, Hotwire, Hotels.com, CitySearch, Evite, LendingTree, Ticketmaster, etc. But they are dependent on traffic. A partnership with MSN would deliver eyeballs in a mutually beneficial relationship. An IAC/MSN alliance makes sense because it MSN from becoming a Yahoo-like competitor down the road while feeding off of MSN's traffic. MSN receives ad dollars/commission.
Here's the Part that is Speculative but Plausible
How much sense would it make for Ask Jeeves to dump AdWords revenue and switch over to MSN AdCenter? What are the benefits?