Is Yahoo Preparing For A Takeover?

When Shoemoney first predicted that Yahoo would be acquired by Microsoft in 2007, I thought he was right on the money (no pun intended … okay, maybe a little).

Since then, there’s been a fair amount of chatter about how Yahoo is selling paid inclusion into it’s organic search results. There’s the odd person that defends this, but most people see it as a bad idea. Rob Watts over at Yack Yack spells out a lot of the reasons why it’s a bad idea.

Here’s a few of those reasons:

• Is it a search engine or a business directory?
• Nobody who has done it got anything but bad mojo for doing it
• How authoritive is ranking and authority … if you buy it?
• One word. Transparency.
• One more word. Integrity.

So Why Do It?

There are so many reasons not to allow paid inclusion and there’s only one benefit. Cash. Cold hard cash.

And all the reasons against it make it a short term benefit, not a long term business model.

One More Time … So Why Do It?

The only reason to do something you really shouldn’t do just to make a quick buck, is because you have to. You absolutely have to. Junkies steal DVDs at the local video store. Search engines sponsor paid inclusion in their search results.

Every War Needs A War Chest

Whether a company is trying to prevent a takeover bid or sees one as inevitable, raising cash is job one. Cash allows a company to fight a hostile takeover. And if they can’t stop a takeover or don’t want to, they can squeeze a lot more value out of the sale.

Threats that come sooner always take precedent over threats that come later. The threat of a takeover is the one reason why a company would sacrifice it’s long-term value and reputation to raise cash.

Of course, there are a couple of other reasons why they might do this. One doesn’t make sense. The other is too ugly to contemplate.