YHOO + GOOG - MSFT = GOOG
While I don't think a deal with MSFT was a good idea, I'm not convinced that a deal with GOOG is the right move by YHOO. They're clearly throwing in the towel with paid search, despite Yahoo CEO Jerry Yang's statement:
Our strategy to fully realize Yahoo!’s potential is based on the convergence of search and display — the next big opportunity in the rapidly growing online ad industry. This agreement helps us capitalize on that... We’ve done something important today. We are directly addressing one key element in Yahoo!’s strategy to lead the way in search and display. I believe it puts us on a faster track to creating stockholder value and strengthening our advertising leadership.How on earth does outsourcing paid search to Google help Yahoo lead the way in search and display?! I think they've given up on search and must have something else up their sleeve. I can see an argument that display advertising is their strong suit, but will that remain the case as Google integrates Doubleclick? I still think these 4 strategic alternatives for YHOO should be on the table.
Anyway, I suspect there'll be quite a bit more to say about this new deal. In the meantime, these posts are the best commentary I've seen so far (with widely varying opinions):
- IsItMeOrIsEveryoneElseStupid.com: Googhoo - Bad News Bears
- BronteMedia.com: Bravo Yahoo
- GigaOM.com: Oow, Eew, Ouch…Yahoo!