The Yahoo Circus Pulls Into Sun Valley Next Week
Starting Tuesday this week, all the major players in the Yahoo-Microsoft-Everyone-And-Their-Mother circus will line their private jets up in Sun Valley for the high-powered 26th annual Allen & Co. confab of tech and media moguls.
Specifically, that would be bigwigs from Microsoft (Co-Founder Bill Gates, deal guy Hank “Hankrosoft” Vigil), Yahoo (CEO Jerry Yang and President Sue Decker), News Corp. (Chairman and CEO Rupert Murdoch), Time Warner (CEO Jeff Bewkes, who runs the conglomerate that owns AOL), as well as Google (the three amigos: Co-Founders Larry Page and Sergey Brin, along with CEO Eric Schmidt).
It could be like that five families sitdown in the “Godfather” movies, except none of the parties can even seem to metaphorically whack each other, as the Yahoo saga drags on interminably.
While BoomTown’s invitation seems to have been lost in the mail–Herb Allen Trois, what gives, Walt and I invited you to our conference! We’re too mean for your pampered poobahs, right?–so we can’t give you an on-the-ground report.
But the Allen & Co. event might be the perfect place to finally make a deal–any deal–this situation surely needs.
So to help, here is BoomTown’s unsolicited advice for the players of this messy mess.
YAHOO: Clearly, Yahoo (YHOO) needs a big break from the drama–and a good first step is to stop its own silly deal-making antics.
First off, the company needs to stop leaking about an AOL merger deal, because it has a been-there-done-that quality that now looks more like a way to look busy.
But it remains a bad idea and feels desperate and employees still don’t like it.
More to the point, there is probably only one true option right now–Yahoo needs to quickly make a deal with Microsoft to outsource its ad search business and/or ad search business.
In addition, spinning in assets from News Corp. (NWS), like MySpace, is not the worst idea and could be a way to juice up social networking on the site.
After all, more top Yahoo employees will soon be headed out the door, unless there is a significant change of direction and, probably, leadership soon.
MICROSOFT: Oh, get over it.
Microsoft (MSFT) is not going to catch up to Google (GOOG) without Yahoo’s search share and that’s that.
It’s not going to be able to grow it organically (Project Granola!), it’s not going to get there with AOL and it’s not going to get there wishin’ and a-hopin’ Google will stumble.
At this point–though it seems juicy to wait as Yahoo’s shares drift downward and as the company moves to its annual meeting and a likely ugly proxy fight with activist investor Carl Icahn looms–waiting is a mistake as it only damages an asset Microsoft should value.
While Microsoft and Yahoo are periodically talking, they also periodically get in snits with each other–the latest due to Microsoft pique over Yahoo’s posting of a regulatory presentation dissing the software giant (see one such slide below; click on it to make it larger).
As I said, get over it.
NEWS CORP./AOL: Make a deal, any deal.
While News Corp. (owner of Dow Jones and of this site) wrinkled its nose over Yahoo’s one-time offer of $4 billion for MySpace (it wanted $8 billion), despite a commitment by News Corp. of also investing $3 billion in Yahoo, if it should do all it can to spin its social networking site out.
Why? With Facebook pressing on MySpace’s momentum, a pending new music service that could use Yahoo’s massive traffic and the plus of being an independent company to compete better, such a move for News Corp. makes a lot of sense.
For AOL, a need for a deal is clear–a dwindling property with some good assets that cannot and should not live within Time Warner. If it gets anywhere north of $8 billion, Time Warner (TWX) should jump at the chance.
GOOGLE: It’s in Google’s best interest to keep the soap opera going, of course. As this situation has developed, it has only underscored exactly how dominant the search giant is.
And, more importantly, just how dangerous to all the rest gathered there Google truly has become.
So, if Larry, Sergey and Eric offer to help the other players work it all out over a roaring campfire, they should all consider themselves warned.
Please see this disclosure related to me and Google.