It’s been a turbulent year for the once proud, now distraught Internet search giant, Yahoo!
The high profile ousting of Carol Bartz set the business world aflame. After taking the reins in 2009, Bartz failed to deliver on her promise of restoring Yahoo! to its lofty station on the digital Olympus of Internet search.
Struggling to stay up to date, Yahoo! added a “deals” adjunct to its stable of services, following in the footsteps of all of the tech giants – from Google with Google Offers, to Facebook with Facebook Deals. In doing so, the ailing company was trying to tap into a new stream of revenue from the online deals phenomenon that appears to be changing local economies by scaling marketing efforts in an incredible way. Nevertheless, when Yahoo launched their attempt, Yahoo! Deals, it was to little fanfare and less success – a chilling sign of the company’s fading market presence.
Yahoo! emerged as one of the sculptors of the early Internet, but has since fallen from grace as competition from Google and Facebook have claimed Yahoo!’s market share over the past decade. In an effort to stay relevant, Yahoo! made a departure from search in order to try its hand as a media company, a content creator and finally advertising. Sadly, poor finances plagued the company and it now finds itself on sale to the highest bidder.
There’s blood in the water, and sharks are circling, but will anyone bite?
Google and Microsoft have both considered bidding on Yahoo!, likely for its 700 million unique visitors monthly. Microsoft has already struck a deal with Yahoo!, providing search results through their own Bing service in exchange for a portion of the ad revenue generated by the ads Yahoo! sells against those results. Some speculate that Microsoft stands to gain from integrating Yahoo! with another new acquisition: Skype, though it remains unclear how Microsoft would execute such a merger.
Google’s potential to buy is much grimmer. Any bid the search behemoth placed on Yahoo! would be under rigorous scrutiny by anti-trust committees. Considering the fact that Google controls 60% of Internet search in comparison to Yahoo’s 13%, it’s unlikely that Google will be allowed to add Yahoo! into its circle, thereby owning the combined total of 73% of Internet search.
However, companies are in discussions about lending capital to private investment firms, which would then attempt to turn Yahoo! around, effectively propping the company up in order to present the guise of competition.
Of course, price plays the most important role here, as many of the aforementioned private investment firms have indicated that they will not pay more than the estimated valuation, currently sitting around $20 million, for the debased Yahoo!.
In the meantime, Yahoo!’s chief financial officer has stepped in to serve as interim CEO and Yahoo!’s board is mulling over their options, which include taking on investment cash, selling the entire company or simply continuing at their current clip.
Whatever the outcome, the fact remains that Yahoo! has its work cut out if the company is to again see the glory of its past.
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