Crossroads for Yahoo!

Terry Semel (CEO and Yahoo! chairman)

The news is that Yahoo! wants to buy AOL, now in cases like these there are lots of false leads and so called ‘inside information’ but trough all the rumours there just might be some truth.

The facts are that Yahoo! has to act now given the facts that Google is now the number one search engine and the number one online ads money maker. Yahoo! fell behind and now has to do something about it. There are a couple of things that Terry Semel (chairman and CEO of Yahoo!) might do and we will speak about some of them.

Now I quote Fortune: “Fortune has learned from multiple sources that Yahoo recently approached Time Warner (parent of Fortune’s publisher) about buying America Online–essentially trying to jump-start talks that broke down a year ago”.

At this very moment there is a number of things Yahoo! can do, buy AOL, be bought by Microsoft (there are some signs in this direction such as the compatibility between Yahoo! and MSN IM users), merge with eBay (it’s quite unlikely but this has been brought to discussion due to the several past negotiations between Yahoo! and eBay).

Buy AOL seems to be the best choice for Yahoo!, the AOL share of the market is sure to bring in more traffic, but will this be enough to beat Google? On the other hand the Redmond giant barely waits to get its hands on Yahoo! and it surely has the necessary resources to make the combined Yahoo! & MSN a real Google slayer. There is one more option (the one that Semel seems to like the most) and that is to invest in development for new areas such as mobile phone adds or online community sites like Yahoo! Answers, “With the landscape changing, I am very, very excited about the opportunities for Yahoo,” Semel says. He might have the patience to wait but will the investors trust his plan?

All in all nothing of the above might happen but is good to keep an eye on the market; after all Yahoo! is one of the oldest and biggest players out there.