Should Amazon Buy Yahoo?

yahoo-an-amazon-companyWith no CEO and rumors of a sale swirling around, Yahoo is once again in the business news for all of the wrong reasons. While Google and Microsoft have been touted as potential suitors alongside the option of selling the company’s Asian assets, one company that isn’t being mentioned has the size and cash to buy Yahoo – Amazon.

What Does Amazon Know About Digital Advertising?

More than you think! Amazon already sell ads on their own site via their rather secretive Adzina division, apparently working directly with large brands to help them reach Amazon’s vast audience with customized ad solutions.

This is alongside the company’s knowledge of its own advertising efforts across multiple channels around the world. It also has well-documented capabilities in data mining site visitors and customer data to match products to visitors – best typified by it’s “People who bought…” feature.

Amazon is a retailer that was born from digital and truly “gets it” – and that’s before we mention the Kindle.

The Kindle and Yahoo: Opportunity?

The Kindle has been a great success for Amazon. They have come to dominate the e-reader category in the countries it has launched in and single-handedly brought the concept to the attention of a wide audience of book and magazine readers beyond those interested in technology only.

Amazon holds data via the Kindle and users accounts of what people like to read or watch, and when and where. Yahoo has a successful publishing division which – content farms aside – produce up-to-date, well-written content.

With the new Kindle Fire Launching with color full web browsing, acquiring Yahoo would offer Amazon several opportunities to combine the two company’s crown jewels:

  • Produce Kindle-only content using Yahoo’s capabilities, tailored to specific audiences (business, finance, travel, etc.) tailored down to sub-category level as identified by Yahoo and Amazon’s combined data mining.
  • Use their combined technology to surface suggested articles to readers on their Kindles – developing the device toward an intelligent, personalized newspaper/magazine (including making this available via mobiles and PCs too – just like Kindle reader).
  • Utilize Yahoo’s sales teams, contacts and technology to monetize this content effectively by using both Yahoo, Amazon, and browsing data to offer highly tailored, even personalized advertising opportunities.
  • Combine Amazon’s marketplace advertisers with Yahoo’s adexchange to sell them dynamic display advertising and retargeting opportunities.
  • Offer Amazon reduced rates on Yahoo network inventory for their own campaigns.
  • Bring experienced, stable corporate governance to Yahoo’s much-maligned boardroom.

It’s All About Data and Technology

Digital companies live and die by their audience share, the data they hold about them and how successfully they monetize both. Yahoo and Amazon between them have all of these elements – with the added strength of Kindle, a growing publishing platform that is in people’s hands and pockets when they commute, relax at home, or are on vacation.

Holding off Google

As Google race to grow their market share in mobile and tablet devices, further chip away at Yahoo’s display revenues and toy with entering the TV business and grow their own movie rental business, both Yahoo and Amazon (including their rental and streaming divisions) will find themselves under increasing pressure from Google from different angles. Banding together might be a great strategic move for both over time – and offer Yahoo one last chance to truly realize it’s value.

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