Yahoo syndrome?

The lust for internet deals, it seems got rekindled after Microsoft’s recent tryst with Yahoo. Otherwise why am I reading Jana Partners lusting for CNET that owns a few cult portals with too many visitors and not as much revenue? And further CBS racing on to stage a $15 billion (yes Billion it is!) rescue even in these hard times for liquidity and cheap credit. Geez….

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In the end, it all leaves me dazed. Extend the Yahoo metaphor further. Could CNET be suffering from Yahoo Syndrome – an affliction characterized by an inability to convert healthy traffic into nutritious profits? If so why would corporate raiders want a piece of a laggard? Do they see a pattern in starting up a proxy war and cashing out handsomely?

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Lastly, has Les Moonves of CBS gone mad? When you know how to make $15 billion, then not knowing how to keep it is a sure sign of insanity.

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"Mr.Jerry Yang, call up Ballmer before you run out of luck"

Yahoo’s troubles seem far from over. It’s getting knocked all over the place. If Steve Ballmer and team destroyed Jerry Yang’s peace for over the last few months, now it’s the turn of his investors training his guns on him for screwing the deal. Carl Icahn is throwing in his might as well.

And now the latest. Imeem has taken over Yahoo's throne by becoming the No. 1 streaming music site in the United States. In what could become another blow to Yahoo, imeem has opened its massive media catalog to third parties with an API that allows outside developers to create music apps that access its library. It's said to be expanding its relationships with music blogs over the next several months. Yahoo, which had acquired large music sites like Broadcast, Launch Media and Musicmatch in order to become the top-ranked music-streaming site in the country, has slipped into second place behind imeem in Compete's list of the top 20 U.S. streaming music sites for March.

I say this to poor Jerry. “Mr.Yang, I suggest you call up Steve Ballmer and ask him to cut that check for $47 billion. You could use some luck if he hasn’t changed his mind completely”.

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Know why? By the time this is all over, we may just see Jerry Yang run weeping into the embrace of Steve Ballmer like he was a long-lost brother. Dealing with Carl Icahn, the corporate world's most annoying back-seat driver, can change a man, make him do things he wouldn't ordinarily do. And now that Icahn has piled up $1.3 billion in Yahoo stock and is seeking FTC clearance to double that, CEO Yang and his brain trust are facing an opponent who makes Microsoft's Ballmer look warm and fuzzy. Jerry Yang will look better in bed with Ballmer than with Icahn.

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I wish him good luck.

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Microhoo deal is very much on

So, what’s happening to the Microsoft-Yahoo (Microhoo) deal? I don’t get to hear much on that. Meanwhile MSFT acquisition engine has not slackened its pace. Here it adds to its Bay area presence by acquiring Rapt, a software and consulting services provider that helps online publishers optimally price and package their display space.

Now I have no illusions of MSFT dropping off on Yahoo acquisition. If anything it means it is even more serious in taking on Google and become an online advertising heavyweight. With Yahoo gone, online application developers were a worried lot. They lost a major acquirer of their businesses. Now they should be breathing a lot easy with Microsoft picking up the slack.

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Will they say Woof...?

Steve Ballmer could not have timed his offer better. Yahoo’s Q4 earnings have lagged and Google momentum is clearly slowing.

In Q4 2007, Microsoft had online revenue of $863 million, compared with $4.8 billion at Google. Yahoo and Microsoft together had more than $2.6 billion in revenue, still trailing well behind Google but in a far stronger competitive position. In effect, this deal is a clear admission by MSFT that its online strategies have failed to work.

MSFT has grown solidly for years, but investors give it little credit. Its stock price has long been stagnant, despite the company’s extremely profitable businesses. The Office division alone had quarterly revenue of $4.8 billion — equal to Google — and an astronomical $3.2 billion in operating profits. The Windows unit is even more profitable. But it has not shaken things up as it used to for quite a while.

It’s a risky strategy for both trying to take on the leader by going to bed with strangers. Never mind so long as they don’t say Woof…

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