Home Online Advertising Conspiracy Theory: AOL And Yahoo Diverge, Then Merge

Conspiracy Theory: AOL And Yahoo Diverge, Then Merge

SHARE:

aol-yahoo-incAOL and Yahoo – so different, right? Well, not exactly, but they have less in common than they once did.

Here’s a crackpot theory for you: The companies are taking different paths in preparation for an eventual megamerger of the sort that was discussed, and then scrapped, back in 2011.

Now we’re deep in speculative terrain, but let’s take a few minutes to consider the  possibility anyway.

A few years back AOL and Yahoo were the wonder twins of Web 1.0 – both were old-school portals with growing ad-network ambitions, a steady pipeline of marketing tech M&A and a lucrative search business (Yahoo’s outsourced to Microsoft, AOL’s to Google).

These days they have less in common, despite their common Google DNA in the corner office. Consider:

– AOL has pursued an extremely focused ad-tech strategy. This is where many of its recent acquisitions, product rollouts and partnerships have been focused, including the acquisition of Adap.tv, the launches of AdLearn (DSP) and Marketplace (SSP), involvement in a TV-buying consortium led by IPG Mediabrands and a “programmatic upfront” later this month. It also still has Ad.com and ad server ADTECH.

– Yahoo, by contrast, has bought one marketing technology firm of note in the last year: AdMovate. Its Genome data-driven advertising platform, the fruits of its 2-year-old Interclick acquisition, has rarely been mentioned since Marissa Mayer took the reins a year ago. And Right Media, well…

– On the consumer platforms side, AOL continues to pursue its “barbell” strategy but has moved away from big acquisitions. The company seems disinclined to do deals of the HuffingtonPost/TechCrunch variety.

– By contrast, Yahoo has done at least 17 acquisitions so far this year – including Tumblr, Summly and Rockmelt. Most are consumer brands, tools or apps with strength in mobile and social. Under Mayer, Yahoo’s center of gravity has shifted to mobile and usercentric moves.

Merger?

AOL and Yahoo have discussed a merger before. It was two years ago this week that news outlets reported on Tim Armstrong’s overtures to Yahoo’s advisors. Carol Bartz had just stepped down after a tenure defined mostly by aggressive cost cutting, and Yahoo’s board was casting around for a new strategy. But the talks led nowhere. In May 2012, Armstrong told a cable news show that a merger was “probably not in the cards.”

Subscribe

AdExchanger Daily

Get our editors’ roundup delivered to your inbox every weekday.

The companies still have much in common, despite their different approaches to product expansion (Yahoo through social and mobile, AOL through video and “pipes”).

“They’re taking different approaches to diversification,” said Jeff Lanctot, the former global chief media officer at Razorfish, who has long familiarity with both companies. “Both approaches are very credible. The strategies, while different on the surface, both are good.”

But those commonalities don’t necessarily add up to redundancies. Were it to exist today, an “AOL-Yahoo Networks” would likely create the largest desktop Internet audience, led by four flagships: Yahoo, AOL, HuffingtonPost and Tumblr. That publisher network would be a credible competitor to Facebook.

And a combined company would have a full complement of ad-tech tools, including an exchange, video and TV-buying tools and much more. Its multiple ad-network businesses might require some paring down, but not too much.

Ned Brody

It’s fair to wonder how Ned Brody might factor into this conspiracy theory.

Brody is the former architect of AOL’s ad-tech strategy, having spearheaded the launch of its SSP/DSP and overseen those products’ integration with its existing ad-network and ad-serving businesses. Earlier this year he was poached by Yahoo as SVP Americas, but he was prevented from officially starting work by a noncompete clause.

That is until this week, when AOL agreed to waive the noncompete as part of a “commercial arrangement” between the companies. Of course, the main reason may have been as simple as AOL wanted to move on rather than become embroiled in a high-profile employee-related lawsuit. But it calls attention to the open lines of communication between AOL and Yahoo.

It probably is silly to suggest Brody’s hire is part of any grand plan on the part of either company’s board. Having a high-level sales and technology executive with knowledge of both companies working internally to prepare for a merger proposal, now that would be ridiculous. Wouldn’t it?

Must Read

Publishers Feel Seen At The Google Ad Tech Antitrust Trial

Publishers were encouraged to see the DOJ highlight Google’s stranglehold on the ad server market and its attempts to weaken header bidding.

Albert Thompson, Managing Director, Digital at Walton Isaacson

To Cure What Ails Digital Advertising, Marketers And Publishers Must Get Back To Basics

Albert Thompson, a buy-side veteran with 20+ years of experience, weighs in on attention metrics, the value of MFA sites, brand safety backlash and how publishers can improve their inventory.

A comic depiction of Google's ad machine sucking money out of a publisher.

DOJ vs. Google, Day Five Rewind: Prebid Reality Check, Unfair Rev Share And Jedi Blue (Sorta)

Someone will eventually need to make a Netflix-style documentary about the Google ad tech antitrust trial happening in Virginia. (And can we call it “You’ve Been Ad Served?”)

Privacy! Commerce! Connected TV! Read all about it. Subscribe to AdExchanger Newsletters
Comic: Alphabet Soup

Buried DOJ Evidence Reveals How Google Dealt With The Trade Desk

In the process of the investigation into Google, the Department of Justice unearthed a vast trove of separate evidence. Some of these findings paint a whole new picture of how Google interacts and competes with its main DSP rival, The Trade Desk.

Comic: The Unified Auction

DOJ vs. Google, Day Four: Behind The Scenes On The Fraught Rollout Of Unified Pricing Rules

On Thursday, the US district court in Alexandria, Virginia boarded a time machine back to April 18, 2019 – the day of a tense meeting between Google and publishers.

Google Ads Will Now Use A Trusted Execution Environment By Default

Confidential matching – which uses a TEE built on Google Cloud infrastructure – will now be the default setting for all uses of advertiser first-party data in Customer Match.