So now that Microsoft’s attempt to buy Yahoo has failed (at least for now) what can Microsoft do to take traffic away from Yahoo and Google and move it to MSN?
How about buy domains.
More specifically buy large domain portfolios and redirect the traffic to MSN.
Microsoft was willing to spend $46 Billion for Yahoo.
By all accounts it would take well over a year to get regulatory approval for a deal with Yahoo, which will cost tens of millions more and then most lightly 2-3 years to truly integrate Yahoo into MSN. The total acquisition in cash, stock, time and costs might top $50 billion.
If Microsoft went out and took down some of the publicly traded domain companies, and the top 20 domain portfolios what would it cost them?
Certainly less than 5 billion.
They would permanently take traffic away from both Yahoo and Google and place it directly into the MSN channel forever.
Add a parking company and you have accomplished the movement of market share in favor of Microsoft at a fraction of the cost of Yahoo.
Dark Blue Sea for example, which owns reportedly 600,000+ domains of their own, generates seven figures for parking domains and has it own hosting company, has a market cap of less than $30 Million based on today’s trading price of $.35.
Marchex.com which owns hundreds of thousands of domains has a market cap of $500 million.
Then there are the major private portfolios (including ours) that generate substantial revenue that could be purchased and the traffic switched over to MSN and away from Google and Yahoo, not just for today or tomorrow but forever.
As we all know, It was reported a couple of years ago that one privately owned portfolio accounted for 1% of Yahoo traffic alone.
By taking out a few public companies, and some of the top privately portfolios could MSN take 5% traffic share away from Yahoo and Google and get MSN into the 15% share range?
I think so.
Just the perception of MSN market share gaining at the expense of Yahoo and Google’s share, would get the attention of the media, advertisers will slowly migrate over, and you start to have something.
Not a bad way of spending a fraction of the money Microsoft is saving by not buying Yahoo and getting into the game.
Finally its always been a logical disconnect for myself and many other domainers that Yahoo and Google are willing and in fact pay domainers for their traffic every month, thereby in essence renting the traffic, but unwilling to buy the domains and thereby buy the traffic and own it forever and deprive their competitors from the traffic.
For just a small investment for a company like Microsoft, they could effectively pick up 5% or more of market share, own it forever, stop making lease payments to domainers for the traffic and take the traffic away from its competitors.
Seems like a no-brainer to me.