By: Brian Kraemer, Channel Web
Wednesday, Nov. 19, 2008
This last year has been disastrous for Yahoo and in particular this last month. February 2008 Microsoft decided to expand their business to search engines to compete with Google and offered to buy Yahoo for 44 billion. The day before Microsoft's bid for Yahoo arrived, Yahoo's CEO Terry Semel resigned. This made Yahoo's co-founder Jerry Yang CEO. It was clear that Steve Ballmer, Microsoft's CEO, was looking to strengthen his company's position in the Web and search engine field against Google. Microsoft was willing to pay a premium price and Yang understood that. Yang sensed that he would be able to get Microsoft to pay more money for Yahoo and waited. Microsoft finally raised their offer to 47 billion. Yang finally announced that he was asking 53 billion for Yahoo and that is when Microsoft walked out on the deal. Then Yahoo began talking to AOL and then News Corp. about a potential partnership, but both deals fell through. Yahoo began to realize they need constant revenue for an extended period of time and decided to try and link up with their number one competitor, Google, to create an ad revenue sharing deal. Initial reports said that Yahoo would reap about 800 million in annual revenue from the deal and that the contract would last 4 years with the option of 6 more. This was the deal that Yahoo was looking for, but advertisers and regulators felt that this deal would infringe on fair competition worldwide. In July the European Union launched an investigation on the deal. This investigation went on through October and Google began feeling uneasy about the deal. Google did not want to damage relationships with their valued partners. The deal was then approved but was gutted and Yahoo would make 80 to 100 million annually with a 2 year contract. This was fine with the desperate Yang, but Google had already decided to end the deal and move on. Yang became very desperate and basically asked Microsoft to buy Yahoo but Steve Ballmer declined and so did support for Jerry Yang. Yahoo stock prices went down until Yang resigned from his CEO position. After his resignation Yahoo's stock rallied until Steve Ballmer once again squashed any speculation that Microsoft would make an attempt to purchase Yahoo now that Yang has stepped down. This looks like Yahoo is going to be scrapped unless something dramatic happens. Yang could quite be one of the dumbest CEOs of a major corporation that I have ever seen. He could not accomplish anything as CEO of the company he co-founded and should have known better to tease a power house like Microsoft. Yang should have realized that Yahoo needs Microsoft more than Microsoft needs Yahoo. If you have Yahoo stock sell it before they go bankrupt.