It’s showdown time at Microsoft: it announced on Monday a 10-year partnership with AOL — which made a big bang, but was essentially a non-event for investors.
For SEO monkeys like me, however, the question is whether Microsoft will secure more such deals with other clients, replacing Google as the preferred search engine of choice.
For once, Microsoft’s announcement has not divided the press.
The agreement brings more focus (on paper), promises higher returns and was a necessary step in the only possible direction for Microsoft — away from the advertising business.
“Microsoft is stepping back from the advertising business in a big way,” the Wall Street Journal wrote.
“Microsoft is to hand over much of its advertising operations to AOL and AppNexus, in the latest shake-up by chief executive Satya Nadella to weed out underperforming businesses and narrow the company’s strategic focus,” The Financial Times argued.
“Microsoft said on Monday it will hand over its display advertising business to AOL Inc and sell some map-generating technology to ride-hailing app company Uber, as it slims down its money-losing online operations,” Reuters pointed out.
Today’s stock reaction?
Microsoft stock trades at $44.3 at the time of writing (-0.11% on the day). AOL isn’t listed anymore, but the shares of its new owner, Verizon, were virtually unchanged, too.
Down & Up And Then?
Microsoft’s share price today said that the AOL deal is not enough for a firm that has splashed out top dollar in almost any field of digital advertising ever since the onset of the credit crunch — but it also says that it is not a good enough strategy if Microsoft stops here.
It’s relevant, however, because in January its shares lost $35bn of value, and in April, its market cap appreciated by about the same amount on the back of upbeat figures for its cloud computing business.
On 27 January, Reuters, in an usual fashion for the news agency, wrote: “investors wiped $35 billion off Microsoft’s market value on Tuesday without any clear-cut, single explanation.”
As Microsoft cuts costs, it will deploy resources elsewhere: cloud, mobile, of course….but what about Bing?
Bing For SEO Monkeys
On the face of it, Bing is still a very important member of the Microsoft’s family.
“It’s a multibillion dollar business, and it does pay for itself right now,” Rik van der Kooi, Microsoft’s ad business vice-president said in the wake of the AOL announcement.
“Our commitment to Bing is very deep and therefor critical for us to continue to monetise that business,” he added.
Bing will power AOL search results, taking over from Google, which won’t be affected by the deal — AOL controls only 1% of the US market, while Google retains a 65% share — and could even benefit from increased competition, but that ultimately depends on how serious Microsoft is about its investment plan in Bing, which reached its highest market share on record (20%) earlier this year.
It’s a catch-up game for Bing, of course, but whatever the outcome, SEO monkeys are safe because our daily duties will remain the same with regard to technical, on-page and off-page strategies.
Well, not only we’ll be safe — we’ll have much more fun!
(Alessandro Pasetti contributed to this article.)
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