Foreshadowing Microsoft and Yahoo! Deal

This morning, the news is all about Microsoft and Yahoo! merging their operations. Is it a good thing for Yahoo! shareholders that the stock got a 18% bump on the news? Of course. This more than makes up for the shrinkage in value which happened following the disappointing Q1 numbers.

Will it happen? I think it's more than likely. It's almost out of a Hollywood script, riding off into the sunset in Redmond. Fin.


Will it make Yahoo! or MSN any more competitive with Google? Not clear.

Henry Blodget is correct that an immediate spin-off of the MSN-Yahoo! would be critical to employee retention. Otherwise, it could be quite a poor deal for Microsoft.

I can't help but wonder if Yahoo!'s path could have been a different one than this ending. Yet, it seems that this fate has been in the cards for some time. See below for a blast from the past.

The following is an excerpt from a February 7th post called "What's the Strategy Inside Yahoo!?":

Time Magazine's Jeremy Caplan (and Jeff Ressner) recently profiled the latest news on Yahoo! with the full article here.

For it, Yahoo! was complicit in allowing Timothy Archibald access for some artistic signs within the Yahoo! campus (of the basketball court and sign directing the Yahooligans to the cafeteria). It's clear that there are other points Yahoo! wanted to get across in the article.

What I find discouraging as a Yahoo! shareholder are intimations in the article that Yahoo! could join forces/be bought later this year with Microsoft, AOL, or Bertelsmann. This possibility is attributed to "analysts," including blogger and commentator Paul Kedrosky and is reiterated later in the full article, and not directly to Yahoo! management. Yet, it doesn't seem to be an accident that it's there.

Of course, there's nothing wrong with increased shareholder value and one way for this to happen would be for one of these companies (or any other) to come in and pay a 40% premium to take over the company. Since proposing a "Plan B" for Yahoo! a month ago, my primary goal was to raise shareholder value for all Yahoo! shareholders.

...

I do have a big problem with the fact that Yahoo! ... has failed to articulate a clear strategy about how the company will be dominant for years to come independently. Better monetizing search is not a company strategy, it's a tactic. Improving a lead in graphical ads is not a strategy, it's a tactic. Doing lots of ankle-biter acquisitions is not a strategy.... Getting snapped up by Microsoft and assimilated into MSN is not a strategy.

I would like to hear one. Jeff Weiner has proudly stated that Yahoo! now has a mission: "Connecting people with their passions, communities and the world's knowledge." Stewart Butterfield has given this his seal of approval, because "A year and a half ago there wasn't a satisfying articulation of what the mission of the company was." I'm still waiting for the articulation for the strategy. The company, investors, and employees need one and deserve one.

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