Microsoft: We Love the Yahoo Brand

    February 4, 2008

Microsoft, in its conference call Friday regarding the Yahoo offer, said that “We love the Yahoo brand”, when asked about what would happen to MSN and Windows Live.

yahoo-buys-msn.jpgThey also said, “There will be a Windows Live”, but avoiding an answer about MSN, which has led to speculation that MSN will be the odd-man out in a Yahoo acquisition.

It makes perfect sense. MSN is pretty much a failed shot at creating a Yahoo-type division, with the only successful parts of MSN either being rolled into Windows Live (Hotmail, Messenger) or existing as popular but rudderless content websites. Microsoft has never been good at content, so rolling the content side of MSN into Yahoo will give those sites a future and a more coherent strategy going forward.

Making MSN a division of Yahoo, while making Yahoo a division of Microsoft, will help combine the companies more smoothly. The “acquisition” of MSN by Yahoo can be seen as a source of pride for Yahoo employees, an acknowledgement to them that they defeated Microsoft in the internet portal game, and that Microsoft is buying Yahoo because it needs them. MSN’s properties will presumably flourish inside Yahoo’s portal, while adding their popularity to Yahoo’s to further cement the pageviews that make Yahoo so valuable.

In time, the MSN brand could either become a sub-brand of Microsoft’s Yahoo internet portal, or be phased out as its sites integrate into Yahoo. While Yahoo’s internet services (search, email, IM, photos) are the centerpiece of the acquisition, Yahoo’s content/news/information sites are huge strengths for the company, and Microsoft will need to keep them strong to make money of this acquisition. Combining or folding MSN into Yahoo will help with that.