Yes, Yahoo! has gone from an exciting successful brand for consumers and employees to Yahoo?, a me-too player with more questions about its future than answers. And the question of Microsoft buying them keeps popping up.
Here are the reasons Micrsoft is not likely to buy Yahoo!
-Microsoft acquistion strategy and history shows that they look for small teams with exciting new technology. Yahoo has neither of those qualities. It is an ageing gorilla.
-Microsoft does not buy market share. They didn't do it during the dot-com when they could have bought out several small dot-com companies with 'eyeballs'. In fact, Google belongs to this camp too except with their recent purchase of YouTube where they basically paid for marketshare.
-Microsoft likes to have majority of its core development done at Redmond and very few other development centers. Yahoo cannot be absorbed in this manner. Although this is not a very big issue.
-Microsoft thinks they can beat Yahoo. And give them enough time and enough releases, and they probably could.
So, what does it mean for Yahoo!? Well, they could be sought out by media giants (unlikely given the whole AOL fiasco), telecom giants (unlikely given their reluctance to spend billions on 'content' companies) or private equity (unlikely given that Yahoo is not yet a cash cow, although you could turn it into one by shutting down all properties except profit making ones like search, mail and then use Google's ad syndicate to generate revenue).
The truth is that Yahoo! is a good business showing steady growth and generating cash flow. If there were no Google, investors would be satisfied and happy. This is a situation where Yahoo! looks bad in comparison although it has done a fairly good job- look where the other portals like AOL, Excite, etc. have gone.
(As always, the opinions expressed here are entirely personal.)
No comments:
Post a Comment