Post 17:08 Mahoo! is an admission of failure

So Yahoo! has told MSFT to bugger off.

Interesting. Yahoo! has struggled for years but says it can extract more value from itself than a 60% premium bid. Just how can it now say it can turn itself around and grow this time?

Actually, I don’t think they are planning that. Anyone who has worked in a company in the doldrums knows that turnarounds are rare beasts.

I think Yahoo! has realised that Microsoft has admitted to the world that it can never, by itself, create enough web inventory to meet the needs of its advertising ambitions. So why give them all of Yahoo! inventory first time they ask? Oh no … if Redmond really needs Yahoo!, let them make a desperately inflated bid for it.

The bid will come, because MSFT’s own online efforts have never really succeeded. They haven’t failed, to be sure. The company has good traffic, is an IM leader and (quietly) offers some very innovative interactive advertising packages. But if MSFT has ever had a breakout online hit, I’m not aware of it. And this even while owning the desktop! (Memo to self, revisit desktop dominance = dominance everywhere meme).

But MSFT’s online bits do not put it into a position to challenge Google. Hence the need for a buy. How desperate will they get?


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