Disclaimer: I worked for Yahoo! for 3 years from 2007 to 2010 in London and in Rolle, Switzerland. I have not discussed this with anyone at Yahoo! I am no longer doing any consulting or any other work for the company and I don’t hold any Yahoo! stock anymore, I only have friends at the company and a love for the brand that was home to one of my first interactions with the internet.
I really, really, really hope Yahoo! does not merge with Aol or get’s involved with News corp. The rumour is that Private Equity houses are getting involved and Aol/News Corp is looking at buying Yahoo!. Mergers and acquisitions have not been Aol or Yahoo!’s strong point. They only work when the target is something that’s going to be core and is not being done by the acquirer before the transaction. When Aol acquired Advertising.com or when Yahoo! acquired Right Media, those transactions worked fairly well, because it was about rebranding and incorporating a new technology and it was going to be a core part of the business.
An acquisition makes sense on paper, Yahoo! is priced at a point that would make it attractive. Even if the strategy isn’t clear; the value of its assets alone make it a pretty compelling story. But price is only one factor, what you need is execution. And an acquisition by Aol would handcuff execution at a point where Google, Facebook and other competitors are firing on all cylinders. Just the thought of dealing with the search deals that the different companies have in place is giving me a headache.
I like Carol Bartz style and she was a breath of fresh air in terms of management ethos. But I’m not sure she totally get’s the Internet and has the vision of someone like Schmidt or even Zuckerburg. I’m not sure who the right visionary is but I’m not sure it’s anyone who’s in either Aol or Yahoo! today.
I definitely think Yahoo! would benefit from becoming a private company, I think the lack of having to answer to investors on short term numbers and being able to invest and focus in a longer term strategy would work well for the company. Also having employees move away from being fixated on the stock price and start thinking about how to really disrupt, design or deliver would help the company move a lot quicker. I just don’t believe a merger/acquisition with another internet beast is the right way to make this happen.