Sorry but I got to completely disagree with Arrington's analysis. Yahoo is a media portal and they do graphic ads in search pretty well too. Where Yahoo went bust was in trying to usurp Google's lead in search. That is the only area where they are #2. Yahoo still is the #1 media portal on the web and the following they have is very loyal.
If Yahoo had taken MS's deal it would've struck at the very heart where the competencies lie.
They would've had to give up on their Panama system which is being tweaked and is currently showing better prospects.
$1B for putting paid to all Yahoo research and their tech is an insult to Yahoo techies.
MS just provided an opportunity to increase the current operating income and cash flow but in all other quarters straitjacketed Yahoo.
Yahoo would be forced to stop managing and hiring search engineers and just display ads. It is an industry fact that MS's per query revenue projected is lower than Yahoo's current revenue.
What Microsoft was asking Yahoo to do was too risky. They have a history of screwing up internet deals and straitjacketing Yahoo's core competencies in exchange for cash is too much to ask.
I will agree Jerry mismanaged Yahoo a bit much, but running a $2B company isn't a joke.
I believe Yahoo was right in rejecting MS's deal. They needed Yahoo more than it needed them.
And Icahn isn't an angel. He is just itching for a fight to make a few hundred millions.
Focusing on the Google alliance gives Yahoo enough leeway to get marginally additional revenue while concentrating on their media and Panama divisions.
The stock might be down now, but the market is quite open for experimentation. And if they get it right, who knows, the stock will perhaps shoot up like before.
If Yahoo had taken MS's deal it would've struck at the very heart where the competencies lie. They would've had to give up on their Panama system which is being tweaked and is currently showing better prospects. $1B for putting paid to all Yahoo research and their tech is an insult to Yahoo techies. MS just provided an opportunity to increase the current operating income and cash flow but in all other quarters straitjacketed Yahoo. Yahoo would be forced to stop managing and hiring search engineers and just display ads. It is an industry fact that MS's per query revenue projected is lower than Yahoo's current revenue.
What Microsoft was asking Yahoo to do was too risky. They have a history of screwing up internet deals and straitjacketing Yahoo's core competencies in exchange for cash is too much to ask.
I will agree Jerry mismanaged Yahoo a bit much, but running a $2B company isn't a joke.
I believe Yahoo was right in rejecting MS's deal. They needed Yahoo more than it needed them.
And Icahn isn't an angel. He is just itching for a fight to make a few hundred millions.
Focusing on the Google alliance gives Yahoo enough leeway to get marginally additional revenue while concentrating on their media and Panama divisions.
The stock might be down now, but the market is quite open for experimentation. And if they get it right, who knows, the stock will perhaps shoot up like before.