Is It Too Late For Yahoo?

Mr. Yang, chief executive of yahoo, faces enormous pressure as he decides whether to try to rescue the company from the clutches of Microsoft, or accept the bid and watch Yahoo become part of Microsoft . Mr. Yang and Yahoo’s president, Susan L. Decker, also moved quickly to hash out a strategy, the two thought that Yahoo’s business plan was basically sound but that the company needed to be better managed and had to get out of some businesses that were not vital to its future. They reorganized to make business units more accountable, and they made some acquisitions to build Yahoo’s advertising and e-mail technology.

My opinion: I think that even the biggest effort they make would not be enough for an idependent Yahoo sharpen its focus, shed marginal projects and become a stronger competitor to Google, the runaway leader in online search and advertising.

Microsoft has made an offer to buy Yahoo for about $44.6 billion, or $31 a share, in a mix of cash and stock.Microsoft said the combination of the two companies would create efficiencies that would save approximately $1 billion annual. At the same time the two companies together will have a better chance of trackling the Internet search leader. However there's no guarantee that Yahoo will be willing to sell to Microsoft -- or that the deal will win the necessary approvals from antitrust regulators in the United States and Europe if Yahoo capitulates.

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