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Dear Jerry and Steve,

I’m writing on behalf of the tens of thousands of people who make their living as search engine marketing professionals. The potential of a Microsoft acquisition of Yahoo would no doubt have a major impact on my life and so many others’ and I want to give you a few ideas on how you should move forward once (if?) the acquisition is finalized.

First off, let me just say that the combination of Microsoft and Yahoo will no doubt motivate search marketers to spend more time optimizing your properties than they currently do. This is a classic case of the sum of the whole being greater than the individual parts (known in German as “gestalt”). It’s currently not worth spending 5% of my time to optimize Microsoft and 5% on Yahoo, but if I can spend 10% of my time to optimize across both networks at once, that makes sense. So expect me and other SEMers to increase our keywords, ad text, and overall spend once the acquisition is approved.

That’s the good news. But now let me tell the potentially bad news. I’m sure that there are many engineers and product managers at both of your companies who are very proud of the tools and user interfaces that currently exist within Microsoft AdCenter and Yahoo Search Marketing. Many of these people will no doubt advocate strongly for their tools to remain active after the acquisition, at the expense of the other company’s tools. In other words, Yahoo engineers will argue for YSM tools, and MSN engineers will argue for AdCenter tools.

Lets be really clear and a little bit crass about both YSM and AdCenter: both suck. I mean this in a relative sense – relative to Google AdWords. AdWords is at least 10 times easier, more powerful, and faster than either YSM or AdCenter. I appreciate the effort both of your companies have undertaken to build your own platforms, but at this point it’s time to just admit that your tools aren’t up to snuff. Any attempt to combine the best of YSM and AdCenter is a mistake. You should either ask Google if you can license their technology, or just outright copy it ASAP.

Here’s a historical analogy that might help you understand what I’m saying. Prior to World War II, the Polish cavalry was renown for their skill and bravery. In September 1939, the German army invaded – with tanks and airplanes. Despite the skill of the Polish cavalry, they were no match for the Germans and were quickly destroyed. You guys are like two commanders of cavalry – even if you choose your absolute best riders (tools) on the best horses (UI), you have no chance against even the most inept tank unit.

So is AdWords the best UI ever? No, of course not. But it’s far and away the best SEM interface out there today – by leaps and bounds. I’m sure it will hurt to admit defeat in this respect, but I guarantee you that the financial rewards will be well worth it. I can’t tell you how many SEMers I talk to who wish they could spend more money on your platforms, but either don’t understand how to use your systems, or have gotten so frustrated that they’ve just given up.

If you are a glass half-full person, this is actually really good news. Think about it: this acquisition is an opportunity to start anew. You can bulldozer through all the corporate politics and do something that will be a financial windfall. This acquisition will look like the greatest thing since, well, AdWords! Combine the added incentive of managing both Yahoo and Microsoft in one interface with a new interface that makes you competitive against AdWords and you’ve created a real powerhouse.

For the record, I’ve sat through a lot of focus groups with your companies over the last eight years. And every time anyone asks me for my opinion about a user interface or tool, I always look straight into the double mirror and say (very slowly): “C-o-p-y A-d-W-o-r-d-s.” I’m sure I’ve annoyed a lot of your usability people with this statement, but the truth often hurts. In any event, best of luck with the acquisition – feel free to drop me a line if I wasn’t clear on anything in this letter!

F4E,

David