Yahoo caves in. Google comes out ahead and another giant, namely Microsoft, willing to overpay for stock is left shaking their head in disbelief. Frankly, i'm right there, too - shaking my head in disbelief. 

Absolutely incredible! For a man of Jerry Yang's intellect, or obvious lack thereof, this is an incredibly stupid decision.
There is not a single positive aspect to it. Antitrust and compete violations aside, what will move an advertiser to purchase Google Adsense to be displayed on Yahoo search results? If i wanted that, i go through Google directly, not to some reseller.

It's amazing that one of the powerhouses that shaped today's internet is succumbing to be a reseller.

The most interesting statement of an article i just read: " Barak Orbach, a law professor at the University of Arizona, said there are reasons to be concerned from an antitrust perspective. And if Yahoo becomes dependent on revenue from Google, he warned, "Google can kill you. Why would Google be interested in keeping you alive?""

Indeed, what is Google's motivation to keep Yahoo alive after a certain amount of time? Once advertisers have transitioned into Yahoo's reseller state of business, the contracts, terms, revenue, etc. belong to Google. There is no reason whatsoever to pull the plug when Google believes to have captured the majority of revenue driving clients.

Jerry Yang has managed to turn down several offers from Microsoft, yet another unreasonable move. MSFT's offers extended between $33 to $35 per share. The glory days of Yahoo have long gone, MSFT's offer certainly more than reasonable. It would have been a life line to survive in today's competition for advertisers. Upon the first talk of the partnership, investors sent Y!'s stock plummeting by 10%. The current share value of Y! is at $22.08. Anybody have questions?!

Yahoo has begun major layoffs quite some time ago. The partnership with Google is not going to stop this. Yahoo's business has been in a constant state of decay, a partnership with GOOG is certainly not the answer. 

From my outsiders perspective, the answers are relatively clear: Innovation, Forward thinking, Cutting edge delivery of Open Source Platforms (the Yahoo widget's were too little, too late), reshaping of the Yahoo free email platform, better advertising strategies, global media presence (outside of making the claim for dumbest business decisions of the 21st century), etc.

Not all is lost for Yahoo, provided that there is still a way out of the stranglehold that Google will impose on them. Unfortunately, under the regency of Jerry Yang, nothing positive is going to happen. 

Long story short. At present, Y!'s only hope is Carl Icahn.

GMJ 

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