I have seen that lot of ink has been spilled over Microsoft’s hostile bid for Yahoo. Also, how Steven A. Ballmer was curt this time, when he announced intentions to the Board and Jerry Young, the Founder CEO of Yahoo, Inc. Microsoft has offered USD 46.6 billion in Stocks and Cash to take over Yahoo. The offer of $ 31 per share is a huge 62% premium over Yahoo’s closing stock price of $ 19.18 on Thursday. It is, Of course a far-cry from its peak of $ 118.75 in 2001.
I take this opportunity to explain how and why this deal may be a good news for SMEs (Small and Medium Enterprises) and Start-ups with limited sales and marketing budgets.
Like ever one, let me also concede upfront that Google is a great technology company founded by Larry Page and Sergey Brin, both Stanford graduates, like Yahoo founders Jerry Young and David Filo.
As an avid user of Internet as well as having built an online company to promote comparison Insurance shopping : http://www.insurancemall.in/ , Team Bonsai and I use Google extensively to remain relevant in the Online space. Hence I can say with confidence that there is no match for Google when it comes to Search Engines. They just don’t have parallel as on today and that is the curse for Internet users, because Google has virtual monopoly on the Internet space across globe without dispute.
This concerns me and may initiate users to highlight the pain areas in the internet marketing business model. Lets face it and acknowledge a fact now that Google is extremely expensive marketing medium and should be exercised as a last resort by any new company trying to successful with limited budgets .
Google Ad program is perhaps a biggest marketing success story by any marketer of any medium be it Electronic, Paper or Internet. Management schools should make Google as a first case study in their curriculum on how it made billions on search marketing business model, unheard and unseen before. Even when recession is hitting America and all businesses, Google has announced the robust growth in its AD earnings for the quarter.
Google is a great company and is doing very well with huge cash flows. No Problem, but what is there for SMEs and Start-ups who in first place made Google such a rich company. The small companies struggles to manage break-even owing to many un-controllable costs and moving targets goes with the easy bet of Google marketing. The collective thinking is that Google charge, advertising companies based on results (PPC – Pay Per Click) and that is the only way to succeed on the Online space (SEM – Search Engine Marketing). On face of it, Google has fair costing mechanism (the PPC concept) where small or big budget companies fits in with ease. How ever, in reality, the small business ends up spending huge and more money to get the search result first page (SRFP) in the hope that more Hits would bring sure business.
My experience of Google Hits to conversion ration is pathetic 100 : 3. It means that every 100 hits, one may get only 3 sure conversions (real sales). SEM mechanism, sure based on your budget gives you desired hits, but the purpose of spend is always sales and associated brand recall which miss big time incase for Google Ad’s. There is no researched data here but I am sure that the thumb rule results of Google marketing is only 60% ROI (return on investment), so it does not help small companies.
I am aware, that revenue margin differs, based on industry, but Google ROI may not be over 50-60% band. I am happy to change my theory or assertion, if there is any credible evidence of better conversion across industries around the globe. And this is the crux of my story that Microsoft taking over Yahoo will bring the cost of Internet marketing down and a level playing field for all. Today, Google has free hand to price its services as consumers have no choice as on today. It is high time that Google should also get some genuine competition now. They are growing unabated by garnering 25-50% of all marketing budgets of any company with limited ROI or success for the advertising companies.
It is also important for shareholders of Google to ask the Google management team to come out with a new revenue model as the present golden goose search engine Ads model will start giving diminishing returns for this great company soon. Even companies particularly Start-ups looking for a quick money source through program like Ad Sense will have better options from Yahoo and Microsoft soon. The competition from Microsoft will force Google to charge reasonable from consumers to place Ads on its Search Page which will improve the ROI to acceptable levels of 80-90% band.
Big and innovative player, chart the course for new business opportunities and options hence time has come for Microsoft to regain its leadership position now. The Yahoo deal will give the must wanted latitude to Steve now.
Cheers !!!
Manish Jaiswal
CEO – Bonsai International Group
http://www.insurancemall.in/
http://www.buynowindia.com/
http://www.newsandreviews.in/
I take this opportunity to explain how and why this deal may be a good news for SMEs (Small and Medium Enterprises) and Start-ups with limited sales and marketing budgets.
Like ever one, let me also concede upfront that Google is a great technology company founded by Larry Page and Sergey Brin, both Stanford graduates, like Yahoo founders Jerry Young and David Filo.
As an avid user of Internet as well as having built an online company to promote comparison Insurance shopping : http://www.insurancemall.in/ , Team Bonsai and I use Google extensively to remain relevant in the Online space. Hence I can say with confidence that there is no match for Google when it comes to Search Engines. They just don’t have parallel as on today and that is the curse for Internet users, because Google has virtual monopoly on the Internet space across globe without dispute.
This concerns me and may initiate users to highlight the pain areas in the internet marketing business model. Lets face it and acknowledge a fact now that Google is extremely expensive marketing medium and should be exercised as a last resort by any new company trying to successful with limited budgets .
Google Ad program is perhaps a biggest marketing success story by any marketer of any medium be it Electronic, Paper or Internet. Management schools should make Google as a first case study in their curriculum on how it made billions on search marketing business model, unheard and unseen before. Even when recession is hitting America and all businesses, Google has announced the robust growth in its AD earnings for the quarter.
Google is a great company and is doing very well with huge cash flows. No Problem, but what is there for SMEs and Start-ups who in first place made Google such a rich company. The small companies struggles to manage break-even owing to many un-controllable costs and moving targets goes with the easy bet of Google marketing. The collective thinking is that Google charge, advertising companies based on results (PPC – Pay Per Click) and that is the only way to succeed on the Online space (SEM – Search Engine Marketing). On face of it, Google has fair costing mechanism (the PPC concept) where small or big budget companies fits in with ease. How ever, in reality, the small business ends up spending huge and more money to get the search result first page (SRFP) in the hope that more Hits would bring sure business.
My experience of Google Hits to conversion ration is pathetic 100 : 3. It means that every 100 hits, one may get only 3 sure conversions (real sales). SEM mechanism, sure based on your budget gives you desired hits, but the purpose of spend is always sales and associated brand recall which miss big time incase for Google Ad’s. There is no researched data here but I am sure that the thumb rule results of Google marketing is only 60% ROI (return on investment), so it does not help small companies.
I am aware, that revenue margin differs, based on industry, but Google ROI may not be over 50-60% band. I am happy to change my theory or assertion, if there is any credible evidence of better conversion across industries around the globe. And this is the crux of my story that Microsoft taking over Yahoo will bring the cost of Internet marketing down and a level playing field for all. Today, Google has free hand to price its services as consumers have no choice as on today. It is high time that Google should also get some genuine competition now. They are growing unabated by garnering 25-50% of all marketing budgets of any company with limited ROI or success for the advertising companies.
It is also important for shareholders of Google to ask the Google management team to come out with a new revenue model as the present golden goose search engine Ads model will start giving diminishing returns for this great company soon. Even companies particularly Start-ups looking for a quick money source through program like Ad Sense will have better options from Yahoo and Microsoft soon. The competition from Microsoft will force Google to charge reasonable from consumers to place Ads on its Search Page which will improve the ROI to acceptable levels of 80-90% band.
Big and innovative player, chart the course for new business opportunities and options hence time has come for Microsoft to regain its leadership position now. The Yahoo deal will give the must wanted latitude to Steve now.
Cheers !!!
Manish Jaiswal
CEO – Bonsai International Group
http://www.insurancemall.in/
http://www.buynowindia.com/
http://www.newsandreviews.in/
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