Most reports today indicate that Yahoo! is on the precipice of getting bought by Microsoft. As we speak, board members are said to be meeting to determine the ultimate fate of the company. With realistic alternatives failing to materialize, do they agree to sell to Microsoft or do they try to strike some sort of deal with Google?
And yet, as Kara Swisher points out, this may not be the end at all. In fact, today’s meeting will largely be an over-the-phone meeting setting the stage for the in-person one that should come next Wednesday in Sunnyvale. Even at that meeting it’s no sure bet that a decision will be made as to what to do with the company.
It’s clear that Yahoo! does not want to sell to Microsoft, but seeing as it’s been only one week since the offer went public, Yahoo is simply going to need more time if they hope to find a viable alternative.
Sure the idea of partnering up with Google and handing over certain aspects of their business such as advertising as search (to increase revenue) might sound more attractive than a hostile takeover by Microsoft – but in the long run that could end up hurting Yahoo! even more. Not to mention the fact that the governments of both this country and the European Unions might not look upon a teaming up of Google and Yahoo in those arenas too fondly.
Erick Schonfeld lays out an interesting alternative at TechCrunch. What if Yahoo! opens up its search technology? He argues that by allowing for the creation of open-source search algorithms, Yahoo might still not be better than Google at overall search, but they could probably take them on in niche and highly selective searches. (We’ve previously covered the concept of open search here, when we talked to Marissa Meyer of Google about that company’s efforts in social search.)
Opening up search is an interesting idea and one that somewhat reminds me of the soon-to-be-defunct Netscape. Right before Netscape was acquired by AOL in 1998 they opened up their browser’s source code, making it open source. While it might have not made a lot of sense at the time and little came from it at first, eventually this move led to Firefox. Firefox is of course now a web browsing behemoth raking in the money – its for-profit subsidiary is thought to be earning somewhere between $50-$100 million a year now, simply through Google paying it to be its search engine option of choice.
The question, if such an open source idea were explored, is what would Yahoo! do then? Attempt to buy itself more time and see if the Internet community at large comes to its rescue? Unfortunately there probably isn’t enough time for that and that would be a very hard sell to Yahoo’s board.
For the moment it looks like Yahoo! may have a little bit more time to contemplate its future. Will this also give someone like Google more time to come with a viable solution by way of a 3rd party? Everything should be on the table as the 25th hour approaches.
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