The Yahoo! Endgame

Yahoo! can only hope for an angel investment by a private equity company (or Microsoft) if they want to be competitive. Firstly, Yahoo! doesnt have enough cash for a major acquisition. Earnings are down 11% this quarter, and Google is growing rapidly through growth and acquisitions. However, Microsoft needs to diversify. MSN "LIVE" is garbage, and its clear that Microsoft is in the market for an ad-serving company (DoubleClick).

A tie-up between Yahoo! and a major financial player could turn out well. If I was running Yahoo!, I would definately consider having talks with Microsoft to merge some operations. Live would become YahooLive! and Yahoo Games could be rolled into MicrosoftZone quite successfully. MSN has been a loosing venture for Microsoft for quite some time. Its almost certain Microsoft keeps it because they branded it with "Microsoft". All it all, its an albatross for the software company.

I expect a merger north of $10 billion in the next 5 years for Yahoo! Unless some of the "also rans" consolidate, Google will hold its power. I'm not saying definitively that Microsoft will attempt to take over Yahoo! or that Yahoo will make an offer, but it should definately be considered. Perhaps an investment in Yahoo! by Microsoft similar to how Google invested in AOL and MySpace. If Microsoft and Yahoo! worked together on YPN/Adcenter, this could produce incredible results. Its the only viable endgame Yahoo! has to fight Google.

Yahoo! has to move fast. Google is spending carelessly, something Yahoo! did while Google was still taking a foothold. History repeats itself, I just hope Yahoo! isnt blind to what is occuring.

 

I think yahoo fall back after google is because yahoo doesn't focus on searching, while google do. If yahoo doesn't catch up with google on searching, how can these 2 company compete? Under that case, they are 2 different companies with different products.

 

I was right about Microsoft eying Yahoo. Heres the news!!! I guess it helps to have worked @ M$.