MSFT-YHOO: Combo Would Hasten The Mainstreaming Of Digital Advertising

imageOnline ad growth has been slowing down for the past few quarters. That situation has been attributed to the law of the large numbers, lack of credible audience measurements and lately, the faltering U.S. economy. While Microsoft’s (NSDQ: MSFT) massive $44.6 billion bid for Yahoo (NSDQ: YHOO) wouldn’t be enough to turn things around completely, the union could at least offer a needed shot in the arm as marketers are expected to pull back spending. Looking back over the past year, which saw a flood of acquisitions in the digital ad space, most observers expected to see the M&A fever begin to cool. It’s tempting to say that this would still be fairly unique – after all, how many other Microsofts and Yahoos are out there? – it will be harder for other online ad networks to compete with a consolidated Microsoft/Yahoo and Google/DoubleClick.

As for the particular competitive advantages a combined Microsoft and Yahoo would have in the online ad space, they are not hard to fathom. I spoke with Tim Hanlon, EVP-ventures, for Publicis Groupe

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