Fred Wilson’s a sharp guy and his Yahoo plan is basically to outsource search to Google and dismantle the place into Yahoo’s many valuable components like the stake in Alibaba. I’m intrigued by this creative proposal though I can’t see Yahoo doing many of these things.
Probably the big unknown in the big Microsoft+Yahoo equation is whether Yahoo will be willing to concede the search battle and use Google search and Google monetization. In the short term this would bring more profit to Yahoo, but long term effects are not clear since they’d be effectively a prisoner to Google who would control a key function of Yahoo’s business. However Yang and the Yahoo board would likely see this as a superior situation to ownership by Microsoft. Google’s stock has been dropping severely but they could still sweeten the pot with other helps, so I’ll be watching for better offers from Microsoft and counters from Google in the coming weeks.
disclosure: long on Yahoo