Time waits for no man. It does, however, wait for regulators.
There has never been an industry that can change so fast. In any other industry, Yahoo would be seen as an up and coming and dynamic business. But in the industry it operates in, it is positively old in the tooth, it bestrides the Internet landscape like the ruins of a once-impressive Roman temple.
And now, for Yahoo, it is decision time. The next few weeks could determine the power structure for the Internet for the foreseeable future – which in Internet terms, is about 12 months.
The trouble is this. Anti-trust considerations, regulators, and the complexities of company law could delay things until next year. And who knows what 2009 will bring.
It is beginning to look like a two-way battle. On one hand you have Microsoft, and apparently News Corp. Microsoft with its deep pockets, wants Yahoo. Frankly, it needs Yahoo. But it is getting frustrated. It has even threatened to lower its offer if it doesn’t get a positive response from Yahoo by April 26.
Yahoo CEO, Jerry Yang says he is prepared to do a deal with Microsoft, but his actions belie his words. The talk is that Microsoft may go direct to the company’s shareholders – if you like, it is hoping to find the yin amongst these people, to Jerry’s Yang.
Trouble is, the best time to elicit shareholder support will be at the AGM, not due until July 12. Once all the complexities are then sorted out, the deal might not be completed until next year.
Then, curiously, News Corp steps into the midst. It is all a little ironic. According to Californian mythology, Rupert Murdoch and Bill Gates used to do lunch, but such was their mistrust for each other, that they used to stare at each other, with long silences the order of the unhappy meal.
But now, apparently, News Corp may throw in its subsidiary My Space, and some cash, in return for a big slice of the action. And what a threesome that will be. Not since Caesar, Pompey and Crassus, will the world have seen such a triumvirate.
But on the other side of the mix, is the possibility of a merger with AOL, and a tie up with, the company that should not be named – so we will say it quietly, Google.
Now, a tie up with AOL does not inspire confidence. The idea of these two companies working together reminds one of the former mighty Western Roman empire trying to stop Attila’s Huns. But then, AOL’s parent company, Time Warner, will throw in some wodge – although, apparently, Yahoo will use this to buy stock, thus effectively offering shareholders an incentive to say ‘no’ to Microsoft . So while such a deal may fend off Microsoft, it doesn’t bode well for the future.
The involvement of Google, however, gives the whole saga a new twist. The idea is to let Google sell the advertising. Something similar is already being tested, with Yahoo agreeing a two-week experiment with Google, in which the two companies share advertising space.
Mind you, inviting Google to join the party does smack a little of ancient Rome inviting the Goths in, to fight its battles for her. That policy came unstuck; we are not so sure that Yahoo will retain any kind of hegemony in the longer-term. Besides, regulators are not likely to be thrilled by the idea of the world’s two leading search engine companies working so closely together.
And therein lies the greatest irony of the whole thing. Messrs Murdoch and Gates seem to be the Davids in this saga – Google, which has the motto: ‘never do evil’, the Goliath. Regulators are more likely to side with little old Microsoft and News Corp.
But it does seem that whatever Yahoo does, it is unlikely that the once-mighty empire – which by the way was once offered the chance to buy Google for $3bn, will ever regain its former crown.
In the battle between Microsoft, Google and News Corp, chances are, Yahoo will eventually be fed to the lions.
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