It looks like Microsoft might be refusing to take no for an answer in their bid to buy out Yahoo! in a bid worth $40Bn.  After having their bid rejecting because the Yahoo! board believed it significantly undervalued their brand and investment in technology Microsoft are rumoured to be responding by attempting to ignite a proxy fight to take over the company.  Such a proxy fight would see Microsoft nominate a group of directors sympathetic to a deal for shareholders to vote on at Yahoo’s annual meeting.   According to Morningstar this is Microsoft using the carrot and the stick approach, just both at the same time! The carrot of the share price, 62% above trading price, and the stick which comes in the form of the threat of a proxy battle.  The drama continues and maybe Microsoft will get their way after all!

Search engine land reported today the release of some new functional by ask which allows a user to upload their own personal background image for the search engine.  The functionality to add a skin to the background has been available since last year but this was only for predetermined images and wasn’t customisable.  I like the idea of customising the results page and this is a much simpler solution than Google’s which involves xml information rather than a simple image upload.  It is also much more flexible and interesting than msn and yahoo’s offerings which only allow the selection of different colour palletes for the page.

This functionality is just another stage in the battle for search engine supremacy but also for loyalty within internet users through added value.  Yahoo had this a long time ago through positioning itself as an information portal and one stop shop for your internet needs (email, news, sport, search…) a similar position taken by MSN.  Then Google smashed this with its simplicity and accuracy of results.  But even the big G has recognised the need to give people more and through iGoogle struck a balance between information on the page and usability by allowing the user to choose which information feeds they received.  The issue at the bottom of all of this is keeping people using your page/engine, setting it as their homepage, and a base for all their online activities.  If they can use your site for everything they need online whey would they go elsewhere?  The longer a user in on your site, the more searches they do, the more ads they view, the more ads they click, the more money you make! Simple.  Expect a lot more releases like in this in the next 12 months as the battle continues.

It’ll take a lot more functionality for Yahoo, Ask or MSN to catch Google but I do know people who now use the Yahoo homepage as they prefer it to Google so there is some movement going on.   You can check out the Ask function on the US site here, it is not yet available in the UK.

In last weeks media week Microsofts’s UK head of marketing, Alex Marks, discussed microsofts marketing strategy and attempted to justify the money they had pumped into Facebook.  Denying it was a simple land grab and a chance to hold of a Yahoo or Google purchase Mark’s validated the purchase by speaking about how Facebook satisfies a basic human need to communicate and engage with fellow human beings.  He also goes on to say how internet behaviour is becomingly increasingly commnuity based seemingly suggesting that the future of the internet lay in propoerties such as Facebook.  Apparently we are no longer talking about social networking sites but social utility sites much more than quirky communication tool and are becoming a tool for managin offline relathionships online.  With the sum totoal of its wares so far the exclusivitiy of banner advertising on Facebook Microsoft has a long way to go before they convince anybody that they got a bargain for their £118M stake.

Tags: facebook, microsoft, aquisition

Following Microsoft’s $240 million investment in Facebook for a small slice of their pie rumours are rife about this deal paving the way for the integration of live search functionality within the social networking site. The inflated valuation of the small stake is undoubtedly an attempt by Microsoft to keep Google at bay but could also be an indication that there is elements of the deal which incorporate an agreement to have live search integration. If this is the case then it could be a good investment for Microsoft as they have struggled to achieve any significant share in the search market place and the volumes available through their paid search platform have disappointed advertisers since its release.

The benefits to Facebook come from the simple fact that users would no longer need to leave the site to perform a search and so would spend more of their timeon the site, thus increasing appeal to advertisers. Oh, and theyve probably negotiated a revenue share on the money generated from Facebook based searches too. The only question that remains is will people using Facebook actually want to perform a web search? Well Myspace and Bebo both have the functionality, powered by Google and Yahoo respectively, so logic would suggest there is something in it. Whether thats worth $240 million, only time will tell.

How the search function may look:

One for the conspiracy theorists amongst you!

Who appears top when you perform a search for the word “search” on google? Well surely its on of Google’s pages right? Wrong! MSN’s live search is the top ranked page for this phrase.

And what about when you perform the same search on the live platform? You guessed it, Google appears in position 1 with yahoo relying on a paid listing to gain some exposure.

Coincidence? Or a hint of an underlying alliance? Ill leave that up to you to decide!