It would seem that after Yahoo set the bar higher Microsoft is looking at going at a more aggressive strategy to aquire Yahoo. I think for Microsoft it is more a case of catching up in the web world and Yahoo is the ideal way to do that, even though it is an expensive way to do so.

The aggressive way is what Microsoft is used to so they could probably work though the larger investors to get the approval they need. Unfortunately this makes Jerry Yangs job all the more difficult as he hold about $1 billion of stock and he would have to work hard to convince fellow shareholders that Yahoo holds more value as a seperate entity then being part of Microsoft.

If I was Yang I would’nt sell as Yahoo holds alot of untapped value which can be seen if they position themselves in the consumer areas that always grows despite what the markets say.

Heres a thought - What are the basics for consumers

Food

Travel

Sport

Housing

Money

Entertainment

So lets take each one of these and break them down into more focused areas and develop applications focused around them. Use the consumer to build the applications, see what they want and how they want it. Focus groups of radom individuals would be a great start. Go back to the basics and work from there.

The company also needs to generating more profits in order to boost that flagging share price which needs a kick. How would we do that ? Their new ad system is good but they need to look beyond that. Mobile applications is going to bring a new wave of opportunities. I think Yahoo should really put significant effort in this but focus on emerging economies where there is huge growth potential.

An example of this would be South African based mobile provider MTN which took a risky strategy of going into Nigeria. This proved to be very profitable for the company and propelled them throughout Africa and the Middle East.

Yahoo needs to start taking more risks and become more agile if they want to combat a takeover.

The Yahoo AOL strategy is not going to be any better for them. In the long run Yahoo as an entity on its own will work better for itself.

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