Our Advice To Yahoo: First, Avoid Bad Advice
from the hail-mary dept
Everybody knows that Yahoo is under a lot of pressure right now, and a lot of people in the media are playing the “what should Yahoo do now?” game. A lot talk has focused on management changes, some of which were announced earlier this week. Perhaps the most wild suggestion comes from Jupiter Media’s Alan Meckler, who thinks the company should buy out Dow Jones (via Tech Trader Daily), the parent company of the Wall Street Journal. The way Meckler sees it, Yahoo already has a strong position in online finance, so it should consolidate its lead and put a focus on that. We hate to recap the recent history of the internet business for Meckler, but for some time it’s been clear that trying to buy up all the good content doesn’t work as well as positioning yourself as a place to find content elsewhere. Companies should make acquisitions if they think they can get a really good deal, or if they think the acquired company could really help transform the acquirer for the better (what some used to call synergies, before that become a bad word). It’s hard to think of a single benefit for Yahoo if it were to buy Dow Jones, not to mention that investors would slam the company for saddling itself with a low-growth, low-margin company. For awhile, there was a lot of talk about how Yahoo was trying to position itself as being more socially-driven than Google, a strategy highlighted by its purchases of del.icio.us and Flickr. So far, it hasn’t done much to follow through on this, but such a move would be better than making a desperate buyout. And if it can’t come up with anything better then maybe its time to succumb to a sale of its own.