There was some interesting noise on the net today about a new potential online strategy for Microsoft. After pulling their offer to buy Yahoo, issuing another statement again yesterday that they might be interested in a partial deal, there are now speculations that they would want to buy Facebook (again). Let's take this apart.The most likely partial Yahoo deal for Microsoft would be buying the search division. This would give it a significant overall search market share in the US and offer a good platform for ad placement. Buying Facebook has it's obvious advantages: page views (although social network page views are not as easy to monetize) and social data.
Under the premise that Microsoft would do both those transactions Robert Scoble came up with an interesting theory: Microsoft could use Facebook's social data on Yahoo's search and offer something that gives it an edge over other search engines, namely social search. One of the bigger issues arising out of this is that Microsoft could block social search for Google's crawlers effectively killing all the hopes for an open solution to the social data portability.
Such an extravagant theory by Scoble can, as expected, not escape the scrutiny of TechCrunch. Erik Schonfeld counters the theory with four arguments:
- Microsoft doesn't need to buy Facebook to spider the social data. A deal could do the trick and would be cheaper.
- Microsoft doesn't need to buy Yahoo search. If it wants to offer social data it could do so on it's own search. The availability of social data in a search engine is game-changing no matter on what search engine.
- Only offering Facebook's social data on search is not game-changing enough. There is a lot more social data out there (Myspace, Bebo, Twitter, etc).
- Social network page views are not easy to monetize and Yahoo search can't help with that.
Even if Microsoft would want to buy Facebook I don't think they would sell out. Zuckerberg is sitting on a gold mine and he knows it. If he was in it to get the quick cash, then he could have sold a year ago. With Sheryl Sandberg on his team now he would be stupid to sell before he figures out to turn his gold mine into a diamond mine. So if at all, a partnership seems to me the most likely outcome.On the other side buying Yahoo search makes a lot sense. It's a preemptive strike against the Google partnership and it helps building up more search reach for it's ad products.
Now as to adding the Facebook's social data to a Yahoo or MSN search...I don't really see the big deal. Yes, it would be an nice differentiating factor but would it make their search engines remarkably better? I don't think so. Would it suck if Microsoft would make Facebook's social data only available on Yahoo and MSN search? Yes it would! How likely is it though, that Zuckerberg would agree to exclusivity like that after saying he wants to speak to Google about Friend Connect to resolve the issues. Apart from that how would the Facebook user base react? Not overly joyful, that's for sure.
In any case, I have to give it to Microsoft for creating so much exiting noise!
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