Yahoo needs to buck up and make a big deal
The New York Times takes a good look at Yahoo's woes today (even throwing in this shot of CEO Terry Semel looking like beleaguered Battlestar Galactica leader Colonel Adama), particularly its struggle to upgrade its advertising system and its inability to land a deal without Google swooping in.
So far, the companies that Yahoo courted but Google bedded include AOL (5% stock sale to Google), MySpace ($900M advertising deal), and YouTube ($1.65B sale). The next could be Facebook, unless Google flubs its offer or Yahoo gets some balls and puts out a stronger offer.
Which, of course, analyst Jordan Rohan (Mr. "MySpace will be worth $15 billion in three years") advises against. "I would prefer they spend less than $1 billion for it," he says, ignoring Facebook founder Mark Zuckerberg's clear demand for more than $2 billion. If Yahoo wants Facebook, it needs to bring real money.
Problem is, Yahoo only has $4 billion cash on hand, says the Times, while Google has $11 billion to blow. So Yahoo's got room for just one huge deal like Facebook, which would hopefully bring back its winning style — it's only been out of fashion with advertisers for a year or two — and put it back into the race with Google.
