Tag Archives: Google

YahoOliver Twist to Microsoft “Can I have more please, sir?”

Posted on by
3

Ina is reporting over at CNET that Yahoo is going to reject Microsoft’s current offer of about $30 per share and ask Microsoft for $40 per share at the Wednesday meeting.    I’m still in the camp that says Yahoo is not in a good negotiating position to make this demand, though contrary to what better connected folks than I suggest I’m guessing Microsoft will up the offer to seal this deal next week.   I say they’ll offer $34-35 at current MS pricing.   This is more than any reasonable definition of “fair market price”, and Yahoo’s board could only reject this at their huge legal peril. 

 I’m not a fan of class action lawsuits but Yahoo can probably expect a gigantic one if they turn down MS and then Yahoo tanks again.   This would probably  be resolved quickly by a board decision to go ahead and sell. 

I’d love to be a fly on Eric Schmidt’s office wall right now as Google’s role in all this is really intriguing.   They can let the merger go and assume MicroHoo can’t be competitive with Google, they can help Yahoo with monetization in a bold way to prop up Yahoo’s stock but effectively keep their one true competitor alive, or they can just sit and wait for it all to shake out.   Most analysts seem to think Google’s in fine shape competitively regardless of their decision and I’d agree with that.   In fact Yahoo’s stubborn refusal to look for the winning Microsoft combination here may be yet another nail in their corporate coffin.    I can’t help but think this is ego-centric thinking rather than the broad, practical, and innovative thinking that built Yahoo in the first place.    

Given that YHOO was trading well under $20 last week I just can’t see how they can make a strong case to Microsoft (or shareholders) that MS needs to pay a premium of over 100% on this deal.    That said, I do think Yahoo is undervalued in the technological sense – they have much of what Google has and have much of the potential Google has, yet they are capitalized at about 1/4 Google even with the recent Google stock meltdown and Yahoo stock upswing from the MS offer.   Yahoo’s a great company. Unfortunately they have failed dramatically for many years to use this greatness to be profitable and they have failed to make the case to Wall Street.  

What is the right answer in all this?     It’s simple:

1.   Microsoft should counter the $40 request with an offer of $34 per share at Wednesday’s MS stock price.

2.   Microsoft will keep Yahoo intact largely in current form for six months.   Yang and the Yahoo board will be given SIX MONTHS to kick whatever asses need kicking to make Yahoo more profitable.   If Yahoo’s looking healthy in six months they’ll stay on this course, but if they can’t fix in six, send them to the sticks and MS will take over in heavy handed form.

3.  Reorganize the languishing publisher programs at MS and Yahoo to compete more effectively with Google Adsense, which has a virtual monopoly in this space and accounts for over 40% of Google revenue.

Disclosure:  Long on Yahoo

Yahoo – Game Over Dudes?

Posted on by
1

Kara Swisher over at All Things D  has an excellent post about the Yahoo Microsoft merger where in my view she suggests correctly that the game is pretty much over.    Google won’t do much to get in to this mess (they’d almost certainly be prohibited from aquiring Yahoo due to antitrust rules), and Microsoft is unlikely to up the generous offer which now amounts to about $29-$30 per share depending on Microsoft’s share price at the deal.   Most importantly, the Yahoo board cannot turn this down without the risk of lawsuits from now until the singularity.    If Microsoft had only offered a few dollars above the sagging YHOO share prices last week this story could be different, but I cannot see how the Yahoo board can come up with a plan to keep the stock around $30 per share AND turn down the Microsoft offer.    I suppose Google might sweep in with a good enough partnership that investors would not be spooked, but that now appears less likely and frankly if anybody might have a hint about that it would be Kara Swisher who has significant insider information about Google.

Ergo, MicroHoo appears to be coming soon to an internet near you.

Disclosure:  Long on Yahoo.

Rumors of Google and Plaxo and the McCarthy Conspiracy

Posted on by
Reply

Megan McCarthy reports at Wired today that Google may be picking up Plaxo for 200 million.    A few hours later Caroline McCarthy at CNET shoots down the rumor saying it appears unfounded.

Wazzup with all these McCarthys?    Are they rival sisters, trying to outscoop or undermine each other?    Spurned same named journalistas fighting for truth, freedom, and the American way?   Is this all just a coincidence?    Are these women related to the infamous Senator from Wisconsin Joe McCarthy?   Rumor has it that …

Google News goes local

Posted on by
1

Google has launched a local news service that scans local news items for context and then lists them according to relevance to your city or zip code query at Google News.   Testing this today on a few Oregon cities I’ve been  impressed with the results as they seem to pull from some obscure but relevant sources and if Google eventually starts using most of the tens of thousands of local newspaper online sites and other sources this could be a superb tool for mashing up news with websites and blogs.

Split Up Yahoo?

Posted on by
2

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

   

Yahoo and Google BFF?

Posted on by
Reply

Reuters reports that Yahoo really wants to find a way out of the MS deal, and Google is offering *something* though it’s not at all clear to any outsiders what that something is.    Probably a partnership to help Yahoo monetize all their traffic using Google tools and perhaps Google search, though I’m somewhat skeptical that Yahoo can come away from this with a valuation boost near the value of what MS has offered.

If Microsoft is smart they’ll let Yahoo be Yahoo, with contractual assurances that Yahoo can keep on innovating and doing what they have done well for some time in the overall internet and Web 2.0 space.  They’ll let Yahoo retain their brand and culture, and basically keep things the way they have been minus the crappy monetization.   In turn Yahoo will have a few years – with the newfound clout and help of MS – to turn around the crappy monetization, bad morale, and loss of search share.  

disclosure:  Got the Yahoo Stocks.  Loving the Yahoo stocks.  

Google to the YahooRescue?

Posted on by
Reply

Google’s concerned that Microsoft could poison Yahoo and make it less open, a state of affairs Google feels created both Yahoo and Google.  I’m sympathetic to some degree to their points, though I think Google has more than enough internet opacity in their critical search ranking practices to make me skeptical of all the whining about how Microsoft won’t play fair and keep things “open”.   

Google has been more open than most, but far less responsive to ranking problems and search issues than they should be.   To the extent MS + Yahoo brings more competition to the space it might help Google see the light and practice more of what they preach about transparency.   Just a quick example of the lack of transparency – Google does not share with publishers the “revenue share” percentage for your own site.    This would be a totally unacceptable practice offline, but in Google land it’s just another example of the power of a virtual monopoly on search monetization.

Meanwhile, Henry Blodget has some  great advice for Yang and Balmer, but it’s clear to me that neither party will view things this broadly.  I think there is only small difference in the IT worldview of management at Yahoo and Google, but a world of difference with MS. As a shareholder I’m loving the Google overture to Yahoo which should boost the share price even more.  This is a fascinating situation because Google has been happy to watch Yahoo whither on the search vine.  Now Google needs to consider a powerful partnership as a defensive attack on the Microsoft search potential after an aquisition.  I think this in part relates to a key factor that is underreported: Yahoo’s search quality is now comparable to Google’s according to many objective measures.

Microsoft and Yahoo

Posted on by
Reply

I’m still digesting all the Yahoo Microsoft commentary but it seems to shake out as tech folks thinking it will not work and investment folks loving the deal.    Hmmm – the comments seemed favorable, but Microsoft lost a huge chunk of value in stock trading so clearly the “market” is skeptical of this.

One of the things I’ve noted in Silicon Valley is how popular Google has become and how poorly regarded Yahoo and Microsoft have been with respect to internet stuff, though part of this may be that I’m involved with mostly search related online events and conferences and Google clearly rules that roost.   I think the Google success and mystique has probably kept tech folks from focusing on the huge potential of a combined MS / Yahoo empire.    Where both Google and Yahoo have succeeded in capturing online traffic Microsoft has conspicuously failed.   Yet Microsoft has continued to pull very expensive enterprise computing rabbits out of its hat, with even the most recent earnings reports suggesting they still are a dominant and profitable force in the software market.     What better way to smooth the transition from old to new than to buy Yahoo?      Pitfalls?   Sure, but the cultural differences will be happily overlooked by Yahoo employees hungry to see their stock pulled out of the sewer.      If Microsoft is smart they won’t merge the brands – rather inject life and some cash into the flailing Yahoo search and affiliate system.    Microsoft could strongarm online affiliate publishers in a way Yahoo could not – by essentially bribing them to move over from Google via 100% revenue sharing.    The extra total traffic and buzz would be well worth the sacrifice of some of the publishing money.     

As a Yahoo stock holder I’m obviously happy to see the offering price pull the stock up, and positive attention focused on this deal, but I also think it’s a good ideas for the reasons I’ve discussed over the past year.   Most notably MS internet failures, Yahoo’s internet successes in Web 2.0, and the huge combined traffic footprint of a combo-company.

Henry Blodget, who helped me in an oblique way with his rumor that pushed me to buy more Yahoo on Tuesday, now is reporting that there may be other parties interested in Yahoo.   This would make sense given the companies clear potential to be as successful as Google while it languishes at a Market capitalization of about 20% of Google.   I’ve never understood the huge pessimism about the company – clearly the “number two” online behemoth.     We’ve got dozens of major automakers, oil companies, etc.  Why is there an assumption that only Google can succeed online?

Disclosure:  I’ve got Yahoo, and finally don’t have to say that hanging my head in shame.

Google’s reinclusion nightmare

Posted on by
2

John Honeck has an excellent piece about the challenges with Google’s site reinclusion process, a virtual nightmare of inconsistency and confusion.     I’ve seen the benefits and pitfalls of good and bad Google rankings and indexing at many sites, and “inconsistency” is the only clear pattern.    On the one hand I don’t have enough information to fully “blame” Google for the problems.  They have their hands full deleting junk or deceptive sites created by extremely sophisticated spamming operations around the globe, but as I noted over at John’s blog:

This is an *excellent* set of observations, and with all due respect to my pal Matt I’ve always been totally unmoved by Google’s suggestion that making the reinclusion and webmaster information process more transparent would somehow jeopardize Google’s ability to kill spammers.

In fact from my observations over the years I think the lack of transparency, along with initally vague webmaster guidelines (now fixed), have caused many if not most of the spam problems as both spammers and regular web folks vie to push the limits of the rules while staying in Google’s good graces. The big problem now is the profound inconsistency in the way sites are indexed, and the fact that it’s very difficult for webmasters to get much feedback from Google.  Google would be well advised to consider better automated or customer pays routines to examine websites for problems and allow reinclusion, because the frustration is building more than they realize in the webmaster and small business community.