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Yahoo Should Dig into Bank Account to Dig Out




Yahoo’s Q2 results, although disappointing, were far from surprising. Continued poor performance, management shake up—sometimes it seems like their tales of woe may never end.

But all may not be lost (yet). ZDNet covers a thorough report by Robert Peck, analyst for Bear Stearns (not, as I almost typed, Bear Grylls), that explores many of Yahoo’s options to turn their future around. And, it seems, the bottom line is that Yahoo should snap up a social network (I hear they’re delicious) (pun unintended, but I’ll take it).

The polls on the page indicate that many agree with ZDNet’s conclusions: 75% of the nearly 200 respondents said that Yahoo should buy a social networking site. 41% of the nearly 250 respondents to their second poll chose Facebook as the network they should acquire. (I should probably mention here that the New York Times also covered this topic, but their page failed to load for me, despite repeated attempts.)

But I’m not sure we should trust these people’s opinions: 20% said the best choice was Orkut. You know, Google’s Orkut. I dare say that would be a supremely bad business strategy: attempt to buy something from a competitor that’s for sale and signal your desperation and ultimate capitulation.

As for trusting Peck’s opinion, you can judge for yourself:

Peck says the impediment to a Yahoo purchase is price. He said Yahoo has most likely considered Facebook, Bebo, Friendster and MySpace, but couldn’t close a deal. Peck estimates that Facebook is worth as much as $5 billion to $6 billion depending on how you slice the numbers.

That may be what Facebook is worth (in some strange way), but what Facebook wants is more like $10 billion. Good luck there.

  • http://www.textadsearch.com/ TextAdSearch

    Maybe if Yahoo started sending traffic to sites!

  • http://www.searchengineoptimizationjournal.com Search Engine Optimization Journal

    Yahoo! should spend their effort trying to set themselves apart, not spreading themselves too thin. Lack of focus is a dangerous thing!

  • http://www.justinsweblog.com Justin

    Agreed TextAdSearch, first though you need to be able to find your site on Yahoo since the new algorithms came into place some sites dropped significantly.

  • http://www.markdsmith.net Mark

    Yahoo has a strong following in their free email offering. They would be better served figuring out how to get them to use Yahoo Search instead of the majority of us using Google as our first choice.

  • Eduardo Fenili

    I dont disagree with them buying a social networking site but lets not forget Facebook having its own problems right now that it needs to work through. The CEO getting sued over stealing ideas for the site and the rate card leak of a few days ago which can be a real hassle for any media company.
    Both of these occasions could have no results and not do anything to Facebook or they could have bad outcomes.

    Facebook has been in the spotlight more and more these days, I think it better for Yahoo to wait and see maybe in this case. Or maybe Yahoo can just snag it and fix it up.
    But…Lets not forget Facebook values itself at what 10 billion? I hardly think Yahoo is willing to invest that much and if they are their situation is far more desperate than I realized.

  • http://www.implantingideas.com kalpesh

    Yahoo needs to change its business model with changing times and must leverage on its strengths. Yahoo’s focus on core competencies might bring cheer to share holder’s face.