Market ponders over Yahoo's options

24 November 2008

With Yahoo!'s CEO Jerry Yang moving out and moving on, Yahoo now has to pick between reviving a possible buyout with Microsoft, albeit at a price lower than the $47.5 billion offered six months ago, or to continue to pursue a much-awaited turnaround that is increasingly as elusive as a like a mirage.

Reports suggest that who steps in to Yang's office would be an indication of this choice. In case the successor is someone from within Yahoo, or someone friendly to Microsoft, it could mean that the Yahoo board is undertaking a fill-in-the-blanks exercise while a buyout takes shape. Alternatively, if Yahoo were to get a CEO with some history, or an up-and-coming technology star, it would signal an upcoming long campaign from the trenches.

Though Yang believed he could turn Yahoo's around, his proposed partnership with Google couldn't withstand the threat of an antitrust battle with the federal government. With Google's support gone, Yang and Yahoo's board couldn't figure out any better way than to part ways, even if it meant that the top slot was yet to have a successor, even as he once again puts on the hat of ''Chief Yahoo''.
 
Reports suggest that given Yahoo's leadership in email and news, with an audience of 500 million people could be a large enough motivating factor for a star player to seek Yang's former office, even if Yahoo's fortunes at the stock markets have been sagging for over three years. Speculations are rife, with suggested successors including the obvious such as Yahoo's current president and Yang confidant Susan Decker, or Yahoo's former chief operating officer Dan Rosensweig, who moved out following a management shake-up last year.

Other names are even more interesting, such as that of media mogul Rupert Murdoch's chief aide from News Corp, Peter Chernin, who is reported to be looking to negotiate another contract. Another suitor is Jonathan Miller, the former CEO of AOL, even though his severance from AOL in 2006 mandates that he can't work at a competitor or rival till March 2009.

`Microhoo' could pose the best bet against Google's dominance

Analysts have also been reported in the recent media as saying that Yahoo might just negotiate a search business deal with Microsoft Corp, even though it remains to be seen if the partnership would be able to pose a challenge to industry leader Google.