Five companies Microsoft should buy before Yahoo

4/27/09: Microsoft is a software company. They are not a media company. Simple as that. So a software company buying one of the biggest media companies in the world (ie. Yahoo) doesn't seem logical. It's also not logical for a software company to buy a portion of the media company's media business... search marketing... no matter how big search media might be.

What is logical? A software company buying other software companies. Politics aside, here are five purchases that Microsoft could make and still play in the sales and marketing market:

• Salesforce.com: If Microsoft had focused on software instead of audience aggregation, wouldn't they have naturally ended up building Salesforce.com themselves? Well, this is a good way to catch up.
• OpenX: Microsoft owns an adserver already - Atlas, but this is an opportunity to reach into a segment of software users that are frustrated with Google and other like offerings.
• Efficient Frontier: Efficient Frontier is a search marketing company that manages $1B paid search budget annually. That's a lot of advertiser market share in one fell swoop.
  
• Omniture: Marketing analytics and marketing intelligence are all the buzz, but current solutions are woefully inadequate. Why not buy Omniture and rev it up into a market leading interactive data aggregation and dashboard tool?
• 37Signals: Microsoft needs something to jumpstart them into the collaborative workspace. This crosses over with Salesforce.com and Office Online in some ways, but 37 Signals has a working model and a good client base to grow from. Most importantly, they are very popular with sales and marketing types.
  

So, I say to Microsoft, "Stop distracting yourself with building audiences and start focusing on building interactive marketing and sales software. Kickstart your effort with some acquisitions and then go ahead and build the best adserver. The best CRM. The best search marketing interface. The best analytics interface. The best collaboration tools. Build the best marketing toolset that can be built. Do it and the market will be yours for now and a long time to come."

4/30/09 UPDATE: Kara Swisher reports a nugget at the bottom of her most recent post: "Among the latest ideas is one in which Yahoo to take over both search and display advertising sales and Microsoft to run the tech behind the scenes." Now THAT makes a lot of sense.

5/7/09 UPDATE: Zach Rodgers thinks that Microsoft would never outsource adsales to Yahoo:

According to the source, the answer to both questions is no. "There's no way in hell is Microsoft going to give Yahoo control on its properties," he said.