Six Reasons Why Yahoo Should Buy Joost

The following post appeared in Seeking Alpha yesterday. Although I don't agree with all the author's points (including that Jerry Yang is only there on a temporary basis or that Yahoo! needs to dress itself up for a sale), I think it's an excellent idea and fits perfectly with Yahoo!'s unspoken strategy of "playing nice" with big content providers. A major acquisition like Joost (and, say, Facebook) would be game-changers for Yahoo! How quickly the discourse would change from discussing Yahoo!'s problems and departing executive to some new swagger in their step.

In light of last week's events, when Jerry Yang replaced Terry Semel as Yahoo's (YHOO) CEO, the company needs to go for some big bets if it wants to stay as relevant in the future as it is now.

Google (GOOG) has already won the overall search war by grabbing 56% market share, compared to Yahoo's 21%. Google has also made an smart move by buying YouTube, as video has clearly exploded in the last 12-18 months. But YouTube is still the wild-wild west of videos, so Yahoo has a great opportunity to legitimizing internet video by buying the emerging online video company Joost.

Here are the top reasons why Yahoo should buy Joost:

1) Joost has already developed an important market position and buzz behind its mantra of "TV anywhere, anytime." It has signed contracts with a whole host of major content providers to stream content on its platform.

2) Joost was started by Niklas Zennstrøm and Janus Friis (Skype and Kaaza founders). These two have enviable track records in building web 2.0 companies

3) Yahoo Videos is going nowhere (compared to YouTube). Yahoo can jumpstart its video story by buying Joost, in a similar manner to what Google did by buying YouTube

4) Joost is in its early stages and is therefore still in beta. As soon as it's available for all, its membership will grow exponentially. Yahoo may be able to buy it now for less than a billion dollars, whereas in 12 months it may have to pony up a much larger sum. (Yahoo lost in not buying Facebook early on.)

5) This move will not only prevent AT&T (T) or Comcast (CMCSA) from buying Joost; it will make Yahoo itself a much more attractive target for AT&T or Comcast, or even for Microsoft (MSFT).

6) By many accounts, Jerry Yang is filling the CEO chair only on a temporary basis, until Yahoo finds a professional CEO. By buying Joost, Yahoo will also acquire Joost CEO Mike Volpi, who has developed his CEO type skills in running large divisions of Cisco.

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