Yahoo the social network?

Yahoo has made a declaration that their day of search aren’t over…well, not just yet. Although Yahoo seems intent on delving even further into social networking (more on that in a minute) they’re still producing extras to entice more users to use their search engine such as a new results page lets searchers connect directly to the Web content they want without leaving Yahoo’s results page. If this proves popular, we would expect to the feature included in the merged Bing/Yahoo Search engine recently agreed.

Ok, so search is pretty much old hat for Yahoo. Where to next? Looking at anniouncements coming out of Sunnyvale, California suggest that Yahoo can see huge potential in the social networking arena. Popular Yahoo products such as Mail and Messenger will be getting a number of ’social extensions’ that allow users to update their status, share photos with friends, and make video calls. Like FaceBook, I guess.

Yahoo’s chief aim is to turn core products, such as Yahoo Mail, into a social hub that a) pulls in more users, b) keeps currrent users C) provides a larger base for advertisers to target (my words, not Yahoo’s!). Again, much like FB! Yahoo will be providing subscribers with the ability to update information about themselves and then post those updates to their social profiles on other websites.

Ok, by comparing Yahoo’s efforts to FB I may be being a little unfair. Regardless of how you look at it, Yahoo Mail is the leading email service in the world which gives them a pretty good head of steam as the drive forward into the world of social networking. But the question is; “Where do Yahoo want to go with this?” In my opinion, there’s little chance of them making serious headway in the social sector of the web - the likes of FaceBook and MySpace have that pretty well wrapped up. If I were running things at Yahoo I’d definitely be eyeing up the potential to grab a slice of the market by allowing the users to post updated profile info via their Yahoo account. Features like this will allow Yahoo to keep users on their site for longer which provides more potential to hammer home those adverts! By providing hooks into other websites Yahoo can remain firmly outside the ring that is hosting the current bout between social networking heavyweights. Illogical? Not really. Consider this: everything we see on the web is basically a phase - companies rise, companies fall. Take Google as the prime example. I have absolutely no doubt that the search giant will still be here in 10 years time but other contenders are likely to nibbled away at the market share. I know lovers of the mighty G might be cursing me but nothing lasts forever.

So, by taking a slice of the pie Yahoo seem to be positioning themselves as a one stop shop for everything i.e. traditional Yahoo services with some funky social addons that will no doubt pull in many interested users. More subscribers = more moolah! Sorry, let me rephrase that: Yahoo wants to provide a social outlet for existing Yahoo users who don’t use Twitter, MySpace..etc, etc!

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Microsoft revenue dips, Apple gaining ground

It doesn’t look like Microsoft is having a good time right now; their last quarterly financial results show a shortfall of about $1 compared to projections and a year-over-year decline of 17%! Before you start to write the MS obituary, remember that they are still a highly profitable company with a lot of cash tucked away in the bank and a huge user base. However, Redmond has never experienced year-over-year declines like this before, so what’s going on?

As you’d expect, executives are blaming the economy: home users are short of cash and companies are sticking with what they’ve got; after all, it works! Given the current climate it would be easy to accept that answer, however…Google is doing well , albeit after a few dips in share price, as is Apple. In fact, Apples share of the high end computer market is growing which means the money to buy high spec computers is out there but it’s not being channelled in the Microsoft directions! This point becomes even more interesting when you realise that although Apple sells to the mid to high end market, historically, they have never held the majority stake.

Windows is at the core of everything Microsoft does that makes money. They sell Windows, then they sell software that runs on Windows. As Windows goes, so goes Microsoft, and right now Windows is heading south.

The Windows OS seems to be losing ground at a rapid pace. Now, many will say ’so what?’ but the key here is that Microsoft builds applications that work on MS platfroms i.e Windows XP - lose the platform and you lose the installation base for your apps!

Many analysts are citing Vista as one of the main sources of Microsoft’s woes: expensive bloatware that needs a pretty high spec just to run (then there was the whole shambles around Vista certified hardware only being able to run Home Basic!). How many Windows users have you met that absolutely love Vista? Sure, Windows 7 looks good and runs well on moderately spec’d hardware but it may be a case of too little too late.

Then there’s Google. The announcement of the Google Chrome OS may, or may not, have sent shivers throught Redmond. Personally, I think that MS aren’t too bothered about Googles OS - at the end of the day Chrome will probably be designed around gathering even more information about your browsing habits so that the big G can send you even more relevant ads! Equally, Google are probably eyeing the announcement of the MS/Yahoo deal with an interested eye. The effective merger makes MicroHoo the second biggest search engine with about 28% of the market.

As I seee it, the major problem for Microsoft is diversification - too much, too soon. The release of the Vista memory hog didn’t help either. Right now, it’s time to get back to basics and deliver something that works, and works well. Once you re-capture the majority share you start to spred the tendrils.

Then again, I could be wrong. Microsoft may not have any plans for the future release of OSes - after all, they seem to be putting a lot of money into SaaS (just like Google). It’s food for thought….

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Rumours abound that Microsoft is prepared to stump up $20 billion (£13 billion) for Yahoo.

The proposal forms the centrepiece of a complex transaction that would see Microsoft support a new management team to take control of Yahoo. However, it doesn’t appear that Microsoft will be aiming for a full takeover of the web giant (looks like they’ve learnt a lesson after having their fingers burnt once…twice…or was it three times?).

There have been rumours cirulating that former AOL CEO, Jonathan Miller, and Ross Levinsohn, a former president of Fox Interactive Media, are being positioned to head up the new management team. Although it’s widely believed that senior management at both Microsoft and Yahoo have agreed the deal there’s no guarantee that it will succeed.

Yahoo isn’t really in a position to argue though; when the first Microsoft bid was launched the search pioneer was valued at $33 per share - right now, it’s about $9 per share.

A number of commentators are suggesting that now is the ideal time for Microsoft and Yahoo to work towards a new deal, although, if you think about it, Yahoo don’t really have much say in what happens. It really is a case of ’sink or swim’ and Microsoft is holding the life preserver!

The deal between Yahoo and Microsoft will see Redmond obtaining a 10-year operating agreement to manage the search business. Microsoft would also receive a two-year call option to buy the search business for $20 billion. This would leave Yahoo to concentrate on their core business: e-mail, messaging, and content services.

This deals allow Microsoft to attempt to recoup some the ground lost to Google. Microsoft’s search efforts have only managed to give them a rather miserable 5% of the market share in contrast to Googles 77%. Adding Yahoo’s search customer base to this figure would, theoretically, give them about 23% of the market.  That said, a large number of Yahoo search users favour it because ‘it’s not Google and it’s not Microsoft’!

Microsoft may own the desktop but, when it comes to the web, they’re rapidly slipping behind. Steve Ballmer has said he is not interested in buying the whole of Yahoo company, but has expressed a strong interest in buying the search business. Maybe the days of Microsoft’s stranglehold are coming to an end only to be replaced by Google!

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Only kidding, Jerry, we love ya really. Well if you haven’t worked it out already, Jerry Yang, CEO of Yahoo, is stepping down. I know some readers will be saying ‘about time, too’ but let’s be fair, the man built Yahoo into one the pioneering internet giants so I’m sure we’ll be hearing more from him.

Yang announced in a memorandum that he will continue in his role until the board names his successor. But he’s not leaving Yahoo - on stepping down, Yang will then return to his previous job as “chief Yahoo,” a corporate strategy role, which means he’ll still be on the board.

Jerry Yang had only been in the CEO seat for a year and a half but during his tenure it’s been a roller coaster ride with shares rising rapidly when Microsoft announced an interest in buying the company. Then there’s the share price wipeout that followed the ‘deal, no deal, deal…no deal’ saga (currently Yahoo’s share are languishing at $11.82, down from around $33 at the height of the acquisition frenzy). Yahoo’s share price actually shot up by 4% after trading on Monday - does that tell you how the investors feel about this decision?

Roy J. Bostock, Yahoo’s chairman, wrote in a statement. “We are deeply grateful to Jerry for his many contributions as C.E.O. over the past 18 months, and we are pleased that he plans to stay actively involved at Yahoo as a key executive and member of the board.”

There is a belief that Jerry’s departure could reignite Microsoft’s interest in Yahoo as Steven A. Ballmer, Microsoft’s chief executive, has complained that Mr. Yang wasn’t interested in the deal. So the Yahoo acquisition death knell might be soon be beating out the wedding march!had no real interest in the deal. Microsoft declined to comment - sure they’re not interested, their much hyped Live Search is sucking both Yahoo’s and Google’s dust! Why would they want to buy the no.2 search company?

But Microsoft isn’t the only interested party; Yahoo and AOL have been discussing a merger for a number of months now. From a company perspective, a deal with AOL would seem more in keeping with the traditions and direction of Yahoo but I’m sure the board are probably more concerned with expanding the waistline of their wallets.

Yahoo said it would look for possible replacements inside and outside the company. Potential candidates include Susan L. Decker, Yahoo’s president; Daniel L. Rosensweig, the former chief operating officer of Yahoo who is now a principal at the investment firm Quadrangle Group; and Jonathan F. Miller, the former head of AOL.

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Ok, I think most people agree that the the Yahoo saga is dead and buried. Yahoo is actively seeking a tie up AOL. This effectively prevents Redmond getting their hands on the pioneering internet company. Actually, no!

It seems that Mithras Capital, which holds 1.9 million Yahoo shares , would like Microsoft to buy Yahoo at $22 per share, according to Reuters. Once an acquisition is complete, Microsoft could then shed the non-search aspects of the businesses leaving them with a significant stake in the world of search.

Mithras Capital partner Mark Nelson seems to think that is a realistic proposition! Does anyone think that Microsoft will bother responding? Ballmer and co. are probably chuckling to themselves over the apparent chaos that currently reigns supreme inside Yahoo. Time for Yahoo to make a stance, get rid of Jerry Yang (I do like Jerry Yang, but it’s time to move on), appoint a new CEO and get back into the saddle.

Mithras Capital have obviously lost the plot - I wonder if they’ve noticed that the world economy is facing armageddon? If they have, why would Microsoft even consider a deal at a time like this? Sure, they’ve got lots of money in the bank but I’ve a feeling they maybe be needing a lot of this ‘loose change’ to shore up the company in the next few years.

Final note: Yahoo were down another 8.1% today, to $12.65, from yesterday’s close of $13.76. Ouch!

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It’s throwback time for the internet pioneer. No, we’re not talking retro apps, look and feel but a return rather an attempt to “…bring you the best of the web so you can find it…” Err, yes. There’s not a lot I can say to that!

To be fair to Yahoo, this actually looks like a serious attempt to recapture ground they’ve lost over the past few years AND to give users what they want. According to Toby Coppel, Yahoo’s European MD, the new look site will feature a reduction on its own content, web mail that brings Facebook-like friend updates and web apps and a range of new mobile search programs.

Reading into the statements it’s look like Yahoo is keen to focus on allowing their users to customise the front page with a mix of Yahoo and third party apps. If Yahoo can get this right it should see huge gains from them - good luck.

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Share price down, down, down!

Recently, the share price of Yahoo was hovering the $34 mark - in part, thanks Microsoft’s attempt to buy up the internet giant.  Yesterday, the price dropped to a five year low of $17.75 - that’s around $23 billion less for the share holders to pad their wallets with!

This doesn’t look good for Jerry Yang - I reckon he’ll be replaced in the very near future but as to when this will happen, who knows! If prices continue to fall at their current rate I’m betting he’ll be gone by the end of November. The Yang farewell march may already be planned but with no formal announcement - look at this way, the Icahn attack dog has been quiet for a while now. Maybe a deal has been done to keep both sides of the table happy.

As to who will fill  Yang’s boot nobody knows but some pundits are betting on Dan Rosensweig returning which, if true, would be one the better decisions the board has made.

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..in Japan.

Figures from Nielson Japan show that Yahoo took 76% of the 350 billion-ish search engine and portal-related pageviews leaving Google trailing far behind with about 5.4%. he figures translate to 21.9 billion pageviews for Yahoo and 2.2 billion for Google. That’s some catching up to do.

To most of us, it might not seem like a big thing until you find out that Japan has one of  the highest levels of internet penetration in the world (about 74%). This makes the Japanese market a key battleground for ad revenue. So how does Google beat Yahoo?

Mobile Web! By targetting Japanese mobile phone companies Google is seeking to sneak in the back door via pre-installed apps on handsets. Docomo and KDDI have integrated Google Search into their start menus which means users get content from mobile and web sites (plus ads, of course!).

Japanese users can also access Google Calendar, Youtube and other Google services. Some Docomo handsets are even being shipped with Google Maps pre-installed.

The question is, ‘Will it be enough?’. I’m not sure,  Internet portals are still big business in Japan and Yahoo caters to that need. Looks like Google are trying to ignore this and draw in users of mobile web apps. It may be successful but only if Google manage to persuade a whole nation of users that the Google way is best.

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…again!

Yahoo isn’t doing well in its attempt to build a social network; Yahoo Mash is closing down. When you sign into the Mash you’re presented with a splash page that’s basically says, come the 29th September 2008 it’s lights out for Yahoo Mash!

The closure of Mash is Yahoo’s fourth attempt at building a social network; 360, which was launched in 2005 was closed down earlier this year. Back in 2006 Yahoo attempted to tie up a deal with Facebook - that fell flat on its face despite Yahoo throwing up to £1.62 billion on the table. Then there was Bebo - a billion dollar that deal that never was. Think: racehorse, paddock, shot!

Let’s face it, social networks offer potentially huge rewards for the company that get’s it right so you can’t blame Yahoo if they try again and again and again…. Looks like they’ve taken the story of Robert the Bruce and the spider to heart.

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It ain’t over until…

…Icahn says “It’s over”! I know, we all thought the Yahoo thing was pretty much dead and buried. Guess again. It now looks like billionaire investor Carl Icahn might just get oust the current board members.

Investore Gordon Crawford looks like he may side with Icahn and back proposals to sweep away the current board of directors. So what? Well, this will leave Icahn in a position to review the Microsoft acquistion offer (Icahn believes Yang and co. should have accepted the MS bid).

And right on cue, up pops the Microsoft who have apparently suggested they are willing to talk to Yahoo!

Yawn!

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