Back story: A few weeks back we heard that Microsoft made an unsolicitated offer to buy Yahoo for $44.6B. Yahoo immediately declined the offer. Rumors that Yahoo was considering alligning with Google to rebuff the Microsoft offer popped up. Then there was talk that Yahoo was talking with News Corp. as well. This week Microsoft plans to authorize a proxy fight to oust Yahoo’s board which will cost them around $20mill to $30mill.

Yahoo profits have been a disappoint on the Street and their profits have fallen some 23% while they try and cut jobs to balance it out. I’m sure the company wants something to happen but I’m not sure aligning with a big backer would really help them.

Microsoft
Over the past couple years Microsoft has dumped a lot of money into their MSN property with their new Ad Center and Live Search Engine. MSN has always been a distant third in the Search Engine Wars and with their prior investments are not making grounds with gaining more users, Gates is desperate.

Google
Google is still the top of the food chain, however, even at the top there is a glass ceiling. Google has easily held 50% of the search market for years but with all of their endeavors they still are really known for Ads and Search. Granted they are profitable enough but if you look at all the projects going on at Google Labs - most never fully see the light of day or get people using them. Not everything Google touches turns to gold.

News Corp.
Yahoo reigns supreme in the world of Internet News and it makes sense that Murdoch would want a jump on that train. First own the newspapers, cable news and then Internet news.

The Need to Stand Alone

For years Yahoo has been an excellent portal. These days Yahoo still continues to deliver popular mail, news, sports, personals, movies, games services (among many others) while adding yellow pages, hot jobs, answers and more. Google has nothing to offer in this department except to mess it up.  To me, MSN has always wanted to be Yahoo by trying to create a portal but it seems they can’t get past being popular for just their Hotmail and IM.

Yahoo needs to stand alone. The world needs alternatives. McDonalds needs Burger King and Pizza Hut needs Dominos. It would be a shame if #1 consumed #2 or if #3 consumed #2 (Google, Yahoo, MSN). I still use Yahoo alot more than I use Google (even with Google being my primary search provider).  Stand strong Yahoo and don’t give in!