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Sunday, February 03, 2008

Who else should buy Yahoo!?

Yahoo!
Microsoft's planned purchased of Yahoo! for US$44.6 billion has the entire tech world shaken up. Sure, it's been rumoured for a long time, but I don't think anyone ever really expected the ball to drop. But drop it did, and we may have to live with the repercussions.

Assuming that the deal doesn't go through (hey, who knows how influential the Flickr/Del.icio.us membership base really is?), who else should buy Yahoo!?
  1. News Corp
    • Pros: Combining Yahoo!'s huge membership base with MySpace's could turn the portal into a goldmine for mining people's habits, similar to how Google knows "everything" about its subscribers. Yahoo!'s strong media focus would also mesh well with News Corp's traditional businesses.
    • Cons: Microsoft's huge bidding price has artificially inflated Yahoo!'s valuation. Murdoch might not be willing to shell out that kind of money, especially after buying the Wall Street Journal.
  2. Time Warner
    • Pros: TW needs to make an impact online. So far, all of its efforts have been to support old media. Its purchase of AOL didn't go according to plan and it needs to get back into the saddle - quickly! Also, like News Corp, Yahoo!'s media strengths would play well with TW's many businesses.
    • Cons: Its management team comes from old media and has no idea of how to make use of new media. Buying Yahoo! could turn into another AOL-style debacle.
  3. Google
    • Pros: Combining the world's largest and second largest search engines would set Google far apart from the runner up. Also, Yahoo! is the most used website outside of the U.S., giving Google incredible international reach. Yahoo!'s Web 2.0 services, like Flickr and Del.icio.us, could also be integrated easily into Google, bringing the latter even closer to organising the world's information.
    • Cons: Google is too big. The U.S. and European Union wouldn't allow it without significant - and crippling - concessions.
  4. Apple
    • Pros: Yahoo! is already working with Apple on optimising its services for the iPhone. Both Yahoo! and Apple share the same Silicon Valley culture of independent innovation that change the world for the better. Apple also needs a significant online presence besides its iTunes Store. .Mac hasn't progressed much since its launch. Folding Yahoo!'s services into .Mac (or the other way around) would make Macintosh computers and iPhones even more valuable than they are.
    • Cons: Steve Jobs wouldn't allow it. He's too focused on devices and getting people to buy music and videos online. Buying Yahoo! would dilute his focus, which may prove to be bad news for Apple overall.
So while I hope the Microsoft-Yahoo! deal doesn't go through, I don't know if there are any other "white knights" available. However, I still think that Yahoo! has sufficient strengths to continue operating as an independent company. It has market share, it has clout, it has sustainable services. It just needs to find the right strategy and the right people to carry out that strategy.

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