Sunday, June 15, 2008

Yahoo has pissed off shareholders and a looming meeting - they can't ignore reality much longer. And reality says Yahoo's future is bleak. They continue to lose market share, they have serious brain drain and morale has never been lower.

The Microsoft search deal seals their fate permanently, and I can understand why they didn't want to do it. This Google deal is their only alternative at this point. They can get out of it at any time, simply by not serving Google's ads. But as long as it's live they'll see their advertisers flow to Google instead of their own search platform, and they have to pay a hefty fine if they end up selling themselves to a third party.

Microsoft may yet get their hands on Yahoo, or at least the parts of Yahoo they want, simply by default as shareholders continue their revolt and/or the government puts a stop to the madness. Or not, and Google gets a long term pass to transition Yahoo's remaining advertisers over to their own platform plus a hefty termination fee if Yahoo gets sold off at some point.

Either way, Google wins. Or Microsoft wins.

But Yahoo has lost.


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