Microsoft plans to buy Yahoo for $45 Billion, but not the old unfocused Semel version of Yahoo. Nope, Microsoft is buying the Yang version of Yahoo : efficient, focused, trimmed down and profitable version of Yahoo … for CHEAP!
On the eve of Microsoft announcing their plans to acquire Yahoo for $45 Billion (based upon Yahoo’s January 31st Stock Value), and before the Yahoo Board of Directors announced that they would be seriously reviewing the Microsoft proposal, ex-Head Yahoo Terry Semel stepped down from the Yahoo Board of Directors.
This is a sign of things to come for Yahoo, as they have finally stepped out of the Semel shadow, even if it took until the eve of a proposed bailout from Microsoft before the recession takes Yahoo’s display advertising as its first victim.
If anything, the plans of Yahoo CEO and original Yahoo brainchild Jerry Yang to strip down the Hollywood version of Yahoo into more of a start-up influenced version of Yahoo over the past months has Googlfied the company, perfectly setting it up for the Microsoft offering.
Terry Semel, the Company’s non-executive Chairman, will step down from the Board of Directors, effective January 31, 2008. Semel initiated discussions with the Board several months ago about stepping down from the Chairman role once the Board was able to identify a successor.
He targeted the time of the January Board meeting for his departure, and has worked closely with Chief Executive Officer Jerry Yang and the Board to ensure an orderly transition process since that time.
Microsoft Needs Yahoo’s Strengths
Yahoo is a strong brand and a generally strong and smart company. They are however, spread too thin. Semel took Yahoo down the road of display funded entertainment when their biggest competitors were putting their guns into search and projects with less overhead.
Over the past couple of seasons, Yahoo has cut off some of the old regime’s limbs from the joint; Yahoo Photos, Yahoo 360 & Brand Universe among the crowd. They’ve had to lay off 1,000 workers and a good amount of their talent has jumped ship, or may be planning to.
Microsoft taking over Yahoo and spinning the company into a very large Microsoft partnered portal and search offering may be the best thing to happen to Yahoo since Flickr. If anything, the acquisition of the properties of Yahoo Search, Yahoo Search Marketing, Flickr, Delicious and even Yahoo Sports, Finance or News will fortify the holes in Microsoft, which has butchered its own search engine with poor branding and results that seem to worsen when all of the other search engines are updating and improving their algorithms.
Yahoo Search Will Replace Live.com
If Microsoft goes about this smartly, they will take the best of Yahoo and apply it to their own properties. Live.com will become Yahoo Search. Every Microsoft search box on every computer running IE will become a Yahoo Search Box. Yahoo is much closer to search than Microsoft will ever be and its worth the investment .
Yahoo Search Marketing and adCenter will indeed merge into something that will become a solid competitor to Google AdWords, and Yahoo Publishing Network does have some strong partners in place to work with adCenter to develop a more desirable offering.
How ironic? Microsoft may very well soon be the parent company of the flagships of Web 2.0; Delicious & flickr. Wasn’t Web 2.0 kind of an anti-Microsoft movement in the beginning?
Microsoft owns part of Facebook, runs advertising on Digg and may soon own Delicious & Flickr. Web 2.0 is over.
Furthermore, the Yahoo acquisition by Microsoft, if it happens, will finally give Microsoft that online arm which it needs to launch their Microsoft Office Suite Online. Who’s going to convert over to Live.com to use Office products via the Internet. Google Docs is an interesting idea, but their offering is still not truly Microsoft Office compatible and pales in comparison to MS Office, as does OpenOffice.
With Yahoo under their belt, Microsoft would have the means of controlling the distribution of MS Office Online and also could launch a much better Yahoo branded version of IE for efficiently monetizing this product beyond current licensing fees. If Microsoft does acquire Yahoo, I would not at all be surprised to see their next step being the acquisition of Zoho to finish off the online plans.
