The Most "Efficient" Brand
The potential of a Microsoft-Yahoo! deal is just too interesting to pass by, so I pulled together the data below from company filings and BusinessWeek's Top 100 Brands (Microsoft data is for the whole company because detailed numbers for its Online Services segment is not available, so it’s not exactly comparable to the other two).
To my surprise, Google’s biggest advantage in it’s profit margin comes from Sales & Marketing Expenses, at only 8% of revenue, compare to above 20% for both Microsoft and Yahoo!. Use BusinessWeek’s estimate, Google’s brand value is about 15 times its sales marketing expenses, while that number for Microsoft and Yahoo! are 6 and 5 respectively. This sure makes Google one of the most “Efficient” brand out there.
| Microsoft | Yahoo! | ||
| Revenue | 100% | 100% | 100% |
| Operating Expenses | |||
| Cost of revenue | 17% | 42% | 40% |
| R&D Expense | 15% | 13% | 12% |
| Sales & Marketing | 22% | 21% | 8% |
| G&A Expense | 8% | 8% | 7% |
| Operating income | 37% | 15% | 33% |
| BW Rank by Brand Value | 2 | 55 | 24 |
| Sales and Marketing Exp. | 9,818 | 1,322 | 849 |
| Brand Value | 56,926 | 6,056 | 12,376 |
| B.V./Sales & Marketing | 5.80 | 4.58 | 14.58 |
If there is going to be a Microsoft-Yahoo! deal, would Microsoft be able to create synergy by cutting into Yahoo!’s marketing expenses?
