Google claims it’s winning in display ads global grab, Yahoo for sale?

We all know that Google dominates the global search market and for a few years now it’s been setting its sights on becoming the biggest online advertising company too (Yahoo is still the biggest in the US) and the company’s senior VP Jonathan Rosenberg is claiming it’s well on the way.

He told analysts yesterday that the company is set to sell $2.5bn of display ads this year including $1bn on mobiles, which he hailed as a clear win for its all-conquering Android system.

Google’s display offerings include banner ads, YouTube videos, Doubleclick AdExchange and the Google display network.

The company reported a 25 per cent jump in third quarter profit to $5.48bn as the ad market bounced back from recession. Alarmingly, for rivals, it kept its operating margins at about 40 per cent even while costs (chiefly marketing, research and 1,500 more people) soared 34 per cent. It has, almost, money to burn.

Meanwhile, back on Silicon Valley’s naughty step, the greatly-unloved Yahoo is once again the subject of takeover speculation with AOL, once the biggest online company in the world but a long way from that now, tipped as a merger partner. Other sources report that Rupert Murdoch’s News Corporation, owner of struggling MySpace, has been approached.

Yahoo’s shares are trading at around $16 compared to the $33 offer from Microsoft it rebuffed two years ago.

Yahoo’s shares are actually cheap because it’s still making money (it’s the most popular website in the US) and it does the kind of advertising things Google is trying to do quite well.

It also owns big stakes in Yahoo Japan and Chinese e-commerce leader Alibaba which must be worth close to $16 a share on their own.

Yahoo’s search operation is powered by Microsoft’s Bing these days so surely it would make sense for Microsoft to come back with another offer? A combination of Yahoo and AOL, run by AOL’s highly-rated Tim Armstrong, just might work. Which is the last thing Microsoft needs.

You May Also Like

About Angie Dean