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Is Yahoo Preparing For A Takeover?

Cash For WhatWhen 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┬áreasons:

  • 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.

Denouement
 

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4 Comments

  1. There’s always some kind of reason behind their actions. I’m sure they want to portray a good business model, but in times like theirs they need to do what needs to be done.

    WHen they get what they need, I’m sure they’ll invest money to make their name to what it used to be

  2. hahaha now that made me laugh !! “Junkies steal DVDs at the local video store. Search engines sponsor paid inclusion in their search results.” that is sooo true! I prefer google over yahoo anyway! :)

  3. Gregg,

    Maybe Yahoo will turn things around. But most big industries only have room for two top dogs; Coke and Pepsi, Boeing and Airbus. Yahoo is the weakest company of the big three search engines right now. It’s going to take a lot of guts and a lot of glory to turn that around.

    Jon,

    lol, I was laughing when I was writing it!

    Yahoo has a lot of great portal properties. But for search, I don’t know anybody who uses anything other than Google

  4. Yeah, I agree with you o nthat one…I hope for the best with Yahoo :D

    I’m personally prefer Google as well. It’s my homepage aha


 

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