The big news of the day is Microsoft’s $45 billion dollar bid for Yahoo. While the blogosphere will be abuzz with predictions of how this will shake up the online landscape, there’s a very real impact on pure "traffic ownership." We took a really brief look at what the potential merger means for Microsoft in terms of net new traffic, and how this will impact the big players in the space.
Microsoft currently owns three of the top ten most trafficked domains (as ranked by UVs). Yahoo.com currently ranks first across the entire web on this metric. What’s interesting is that, because of both Yahoo and Microsoft’s massive audiences, the overall pool of Unique Visitors grows by a surprisingly small amount. Looking at the chart below, Microsoft Properties* and Yahoo.com share 96 Million Visitors. In fact, the net new traffic, in terms of US Unique Visitors, only grows by 31% (37 million people). To throw the transaction value into the mix, that translates to $1,186 for each net new visitor.
But Unique Visitors are only one component of traffic measurement. In terms of total page views and Attention, a Yahoo acquisition would nearly double Microsoft’s numbers. The chart below shows the net new Unique Visitors, Pageviews and Attention that would result from the potential merger.
How would this potential merger shake up the overall internet landscape? Two-fold.
- Microsoft would dominate the web in terms of display ads. In addition to the billions of page views on various Microsoft domains, their ad network will grow exponentially.
- Microsoft would become a much bigger competitor in the search market.
The chart below shows how the combined search, and site traffic will reshape the top performers on the net.
Google would still take the lions share of online search traffic but the combination of Yahoo and MSN/Live would grab about 25% of all search market share. However, the size of these two online giants would simply dominate any domain level traffic ranking, no matter how you slice the data. In terms of page views, the merged company would get over double the page views of second ranked MySpace.
There are many, many implications of a merger between Yahoo and Microsoft. As we dig deeper into this exciting development, we’ll be sure to keep you posted.
*In this analysis, Compete did not consider Yahoo Inc’s offsite traffic (at sites such as flickr or del.icio.us) and considered Microsoft traffic on Microsoft.com, MSN.com and Live.com