[...] news of a potential merger between the two companies first broke early last year, I wondered what it would mean for domainers. At the time I was conflicted. But then the potential Yahoo and Google hookup scared [...]

[...] I’ve been torn about Microsoft’s proposed takeover of Yahoo! It could have been good for domainers but it [...]

[...] is one of the reasons I don’t like the Yahoo-Microsoft (MSFT) acquisition. Microsoft will (or should) enter the domain space soon, [...]

@Steve, I wouldn’t worry about Yahoo’s employees. Most of the good ones have left already anyway. The headhunters have been prowling around there for some time.

And I’m also sad to see this happen; which, given the large stock-price premium MS’s is offering, is likely to happen unless a white knight comes along.

The employees at Yahoo have got to be in shock, and horrified, at the thought of working for Microsoft…their top people will probably bail if this comes to pass…many of them going to startups hungry for such human assets.

I’m sure the headhunters are having a field day calling into Yahoo…

I think this is a good deal for any 3rd party publisher (domainer, arb-player) at Yahoo! because it reafirms the value proposition in what they do. Analysts have commented that 33% (yes, one third) of Yahoo’s revenues/traffic come from third party syndication like domainers, arbitrage players, browser search plugins etc. and the remaining 66% of revenues is in much more vulnerable display advertising, subject to erosion by other comers like Google-Doubleclick. So when you think about it, Microsoft has just bought one of the largest redistribution companies in the world. If I were domain traffic redistribution shop I’d feel pretty good about the value proposition of my platform right now.

Granted YHOO has that legacy advertiser base from the Overture acquisition which clearly is a big incentive to do this deal.

What this is going to do is put Google revenues under significant pressure going forward. Rev shares are going to go much higher to publishers and third-party redistribution houses. That is going to drive further redistribution shake-ups (individual domainers shuffling between ad partners). Google and Yahoo will try harder to skim payments on the backdoor via smart-pricing, TQS and other discard rate like machinations, all while front door revshare payouts increase.

And this two-party world will probably leave room for a new independent comer to try to enter the fray. Perhaps Ebay or AMZN will buy Sendori or MIVA, creating their own platform for buying publisher traffic cheaper. Perhaps ASK will pull the rabbit out of the hat and try to create a viable third marketplace. Perhaps somebody else .. adbrite etc.

Initially I’d say try to negotiate a deal with Yahoo, and if that fails to be fruitful then turn hard to Google. Goog is going to need all the publisher traffic it can muster to compete in the years ahead whether it knows [acknowledges] it yet or not. There is still complacency at Google so it may be a touch early though.

In the final analysis, This is good because what Microsoft has said openly is that they are buying eyeballs and a large tranche of the eyeballs at Yahoo are publisher partners ~ and there aren’t that many big ones.

In fact if Google wasn’t so aloof/arrogant and a little smarter, they would start cherry picking publishers who are on the Yahoo platform. That’s what they did in 2003 to the former admarket (Overture) when they purchased “Applied Semantics” and single handedly carved the heart of Overture’s traffic away; kicking-off their foray into the redistribution biz and forcing Overture to sell itself to Yahoo on diminished terms.

The entire domain industry (as big as it is) is only worth a few billion and it supplies a full third of the most permanent valuable traffic/eyeballs that Microsoft is paying 44.6BILLION for. In fact when viewed from an eyeball perspective (the only real perspective that matters), Microsoft is paying 14.86 Billion for a redistribution platform and ad market.

Google is a registrar and could easily absorb/manage a million good domains by buying 20 top tier portfolio companies for 4-6 billion or so, and then roll up CNET and Marchex for another 1.5 bil in order to manage and build out the sites. For that 4-6 billion they’d get 183 Million uniques a month carving out the Yahoo ad network and dramatically changing the value proposition of the Yahoo acquisition.

My first thought was AOL/Time-Warner when I first heard about the possible new MicroHoo.

The whole thing makes me sick.

Yahoo just has not found their “Steve Jobs” yet.