Microhoo: Now What for Domainers?

Acquisition talks collapse…what it means for domainers.

I’ve been torn about Microsoft’s proposed takeover of Yahoo! It could have been good for domainers but it also had a downside. Now that Microsoft (MSFT) has told Yahoo (YHOO) to “go search itself”, where does that leave the domain industry?

My main concern is that Yahoo will get more in bed with Google (GOOG) for its advertising. Yahoo has already tried outsourcing some of its advertising inventory to Google, and apparently the test went rather well.

In the long run, outsourcing ad inventory to Google is death by a billion clicks for Yahoo. So perhaps it was just trying to show Microsoft how much value it could add.

If I were Yahoo, I’d strike a deal with Google to outsource advertising to countries that Yahoo doesn’t currently serve. Then I’d figure out how to make my current advertising platform more user friendly and rev it up. (Oh yeah, it already tried that).

But what about Microsoft? It’s time for Microsoft to become a real contender in syndicated content advertising (ala Google Adsense) and to enter the domain parking channel. Microsoft may be adverse to the domain channel given how many people it’s gone after to get Microsoft typos back, but the channel still represents a growth opportunity for it. Microsoft will have to start by offering very high revenue shares (90%) because it’s click prices are lower than Google. Over time it can lower those as its click prices increase.

Microsoft can also learn from Google’s missteps in content. Microsoft soft-launched a content ad network to its own properties already. It needs to be cautious about who it lets in so it doesn’t fall into the same trap as Google did.

C’mon, Microsoft. Let’s give Google a bit of competition for once.