Is Yahoo making the wrong move?

There are a lot of talks around Yahoo’s move recently. Y’s decisions to reject the Microsoft deal and partner with Google on search advertising market don’t sit well with a lot of people. Some think Yahoo is making stupid decisions.

I beg to differ.

Being bought by Microsoft will make a lot of shareholders happy today. But if bought by Microsoft, 3 years from now, will Yahoo still be relevant at all? Choosing to remain independent will give Yahoo a chance. But what about the shareholders? Well shareholders don’t RUN the company. They can make their influence by choosing the board, or cast their vote by selling the stock. I don’t own YHOO so this might sound insensitive. But company shareholders having disagreement with management team is not new and opinions from shareholders who want to sell the stock and cash in should not be used to judge the company’s direction.

Will Yahoo+Google deal hurt Yahoo in the long run? It might hurt Yahoo’s advertising network. But Google is already so dominant in search market and Yahoo may never be able to catch on with its technology today. The key is for Yahoo to innovate and find new ways to establish a stronger brand, not necessary all in the search market though.

Some also have concerns that Yahoo is helping to create a monopolistic Google which will turn evil in no time. Google has 60% search market share because so far its search technology is the best. And it is not so dominant in other areas and Yahoo’s deal will not make it be. I think the key is to believe that technology is alway moving forward, today’s big players will be replaced if they stay still, and there will always be newer and better things coming out. Technology is simply not a business that can be established upon monopoly.

Having said that, the challenges ahead of Yahoo are obvious and I wish them the best of the luck.

This entry was posted in my 2 cents. Bookmark the permalink.