Monday, January 28, 2008

Who Really Could Buy Yahoo And Succeed

The New York Post wrote an article about companies interested in buying Yahoo! now that it is below $24 a share. But I think the writer, while well versed in who could be interested does not know the space well enough to see who really will or could buy it and succeed.

AOL - well that is just a joke. They are having a hard enough time keeping their own efforts afloat and buying Yahoo would just add to their problems.

Yahoo needs someone to take charge and realize that the company is not in competition with Google for search share. What has been the main strength of the company has been its communities - Yahoo Groups and all variations of that, as well as their solid content areas. Monetize those through banner/sponsorship and other media and grab search as an adjunct to that. The searches would become more specific and conversions would go back to the days when Yahoo led the field.

The Post's list was: AOL, AT&T, CBS, Comcast, Microsoft, Viacom and News Corp.

At&T - come on they have a hard enough time getting their services working properly... I hate the dropped ads commercials because instead of dropping they turn a lot of my conversations in to "hear every third word" gibberish.

CBS - well they have the money but they would bring the traditional media model to Yahoo and create what Seth Godin calls "A Meatball Sundae." Their online efforts are okay but reflect an old media style that if applied to Yahoo would just hasten its demise.

Comcast, Viacom - jumping to the web to offset dropping offline numbers - as investor I would say pass.

Okay the two real contenders are left: News Corp - another Aussie's multinational oligarchy - hey Rupert you buy Yahoo and people will start to see you as a James Bond bad guy - but if you do I can be bought for advise!!!

And finally Microsoft - this is the real company that could do something with all that Yahoo has and could be. Of all the potential buyers Microsoft actually knows the space the best and could combine their own success models in Finance and other content verticals to further improve visitor numbers and confidence. With Yahoo's search numbers combined to their own, Bill will be closer to the Google share of the market and then possibly be able to compete with Larry and Sergey for the space and help us all.

The only other dark horse would have to be a company from Asia.... Baidu and Alibaba come to mind.

So Jerry if you want to mention this article and its ideas in your quarterly earnings report feel free. Good Luck tomorrow.


  1. good post Frank! I would think one of your semi-contenders News Corp would be a good suitor for Yahoo! as Yahoo Finance is tremendously popular, and News Corp really could use the portal angle. Some Yahoo products/features/communities might tie in well with MySpace as well - MIGHT it the key word here.

  2. Good point.... but Rupert just seems to be getting too old for this type of acquisition

  3. I Dunno.

    I think it's hard for a company with Yahoo's cost structure and investor pressures to stay competitive in the content market. Social networks, news and blogs are devolving content away from big sites to smaller sites run by hungrier people.

    Being based in Silicon Valley might help them lead in technology, but it makes it harder for them to connect with mass audiences in the rest of the US and world.

    My first instinct to write Microsoft off -- God knows that their online properties are underperformers. That said, their success with XBox Live shows that they're able to deliver compelling and competitive online services.

  4. Well if the stock price gets much lower even I could buy them.... now that would be fun