It’s important to remember – even as we see another example of why a technologist can’t run a company – that Jerry Yang did bring a tremendous amount of value to the company he co-founded in 1995.  He’s been an asset and will continue to be involved in a technical and board level role.  It’s just unfortunate that his closeness to the company seems to have cost Yahoo the opportunity of the decade because of his resistance to be acquired by Microsoft for as much as $33/share or over $35 billion.  Today, with Yahoo trading up almost 9%, closing at $11.55, $33 seems really, really far away.

On a day where the Dow is up 1.83%, it would appear that Yahoo’s increase of 9% is a sign of approval from the often cutthroat market analysts.

“Yang’s departure will be viewed positively by investors as there was lingering distrust following the aborted Microsoft takeover,” Piper Jaffray analyst Gene Munster wrote to clients.

From this perspective it seems obvious that companies are going to have to consider alternative forms of survival much more closely than ever before, because as the markets continue to contract – and even if they don’t – the chances of quickly returning to the high-profile years of past are slim.  Yahoo could have absorbed their technology and users into Microsoft and used Microsoft fortunes to expand their technology and tools to really be competitive with the likes of Google and AOL.  Now it’s difficult to imagine a scenario where a surviving Yahoo is able to grow and compete rather than becoming a simple niche in the free mail/news marketspace.

Ranter

Yahoo stock was up considerably today as investors considered whether or not this would reopen discussions with Microsoft, which frankly seems like  amuch better fit, although I truly believe that even the merged companies would soon become a rounding error in Google’s advertising success.  As an advertiser, there are a lot of options out there, but very few offering the same CPC value as Google.  At this point Microsoft has declined to comment, although I suspect that their consideration for this deal is soured and any offer Yahoo receives from Microsoft will reflect a significantly reduced market value.

Yahoo has expressed frequently that they would prefer to remain independent, but few financial analysts believe it can and few on the Internet seem to feel that Yahoo offers a compelling value for the average consumer, and without marrying a product oriented company their audience will soon erode to companies that are able to offer better, more compelling product lines.  At the same time, with the changing economy, Yahoo has gotten very cheap, and while few other companies could match Microsoft’s buying power, it is possile that companies like Time Warner could try and fold the brand into their marketing units.

Only time will tell, but it’s not looking good for Yahoo right now.

Ranter

Ranter

My opinion on the other side of this is simple: additional savings will come from eliminating part time and contract personnell from their payrolls.  This is a common ploy and I’m sure that Yahoo is used to playing this model.  Good for them – they should be around 500 people and then I think the market will be happy with their prospects (it’s a web company for Christ’s sake.)  It’ll never get there, but I’m hopeful.

I’m just wondering, now that the dust has cleared, how stupid do these people feel for not letting the Microsoft Acquisition play out a little further?  Really, do you think Microsoft wants Google to be as successful as they’ve been?  No, and if you believe that it’s a no-brainer that they’d be willing to throw some additional funding to anyone able to even partially erode Google’s dominance in the search space.

Ranter