Feb 10 2008
Yahoo says “No Thanks” to Microsoft Bid
Following up on a previous entry, Yahoo has said “no thanks” to Microsoft’s bid to buy them for $44.6 million. They plan to outline the issues with the initial bid on Monday. Expect to hear that yahoo is asking another $12 billion for a buyout. Somebody should tell Yahoo executives they should have been flattered by this offer. Below are a few reasons why I think Yahoo should have taken the deal and ran to the bank.
1) Their brand name is not getting any hotter- Yahoo was at their hottest back in the 90’s. Since then they have always seemed to be a few steps behind other engines.
2)Their email service took a huge hit when Gmail was unveiled- Many Yahoo users were intrigued by Gmail and never came back. This may be because Gmail has been cutting edge with updates and Yahoo email has moved along slowly.
3)Yahoo Messenger is not that hot- I represent a small segment of the population, but I don’t know many people using Yahoo Messenger. AIM, Gchat, and MSN Messenger seem to be a more popular choice. Messaging services are a huge way to suck new users in, and Yahoo doesn’t have the “messaging appeal”.
4)Internet News is watered down now- People can get current events online anywhere now, their news services are not gaining value. MSN, Google news are both just as strong when it comes to news.
5)Average Online Advertising- They thought the roll-out of the “Panama” pay per click interface would let them compete with Google Adwords. They are still playing second fiddle to Google in paid advertising revenue. If less people are searching your pages, less paid clicks will be coming Yahoo’s way. They will really need to find a new way to generate ad revenue if these trends continue.
Even with my Yahoo negativity, there are two reasons (in my mind) that Yahoo has value
1)Yahoo Finance- They are still one of the best finance resources on the Internet. They have some of the most active message boards for stock research. Google has tried to get into the game, but Yahoo still holds the lead. This bring Yahoo LOTS of traffic and revenue from financial advertisers.
2)Fantasy Leagues- Yahoo has a stronghold on free fantasy leagues. This keeps people coming back to their site many times a day and also great advertising revenue. There are other free fantasy services out there, but Yahoo has loyal fantasy clientele. They have also done a great job updating the functionality of their fantasy portals.
I really think Yahoo and MSN needs to join forces and make a run at Google together sometime over the next few years. They are both in the same boat and can offer each other some really valuable support. We will have to wait and see if this deal is dead, or maybe there will be a fair counter offer on the table sometime soon.
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