p2pnet news | Freedom:- Today is the day for Yahoo.
“After a week of hectic negotiating, it’s clear that no one is going to step in with a competing acquisition offer to what Microsoft put on the table last Friday – $31 per share,” says TechCrunch, going on:
“There are only two options left. Accept the offer in principal, and try to increase the price with no negotiating leverage at all, or do a deal with Google to outsource search advertising and, likely, search itself.
“The board, we’ve heard, is basically being told by outside advisors to take the Microsoft deal. But we’ve also heard that a contingent of senior executives at Yahoo, who are willing to do literally anything to thwart a Microsoft takeover, are pushing for the Google deal and will present their case at the meeting.”
If Yahoo were to outsource search to Google, the immediate upside would be 25% or so to Yahoo`s cash flow in the form of increased revenues (revenue per search query would likely jump to 9 cents from 4 cents today), and cost savings from operations (servers) and headcount reduction. That may add $7 billion or so in immediate valuation, or around $5 per share, say some experts we`ve talked to (less than half the premium Microsoft is offering).
Nearly a third of Yahoo employees would be shown the door, though. Estimates are that Yahoo employees 1,500 or so people in each of search, the search advertising platform, and advertising sales and operations. All of those employees would likely be fired, unless Yahoo chose to retain its core algorithmic search product. Experts say, however, that good search and the ad platform go hand in hand. Without data from the search advertising side of the business, search itself is hobbled. It`s likely, therefore, that Yahoo would shed all of those jobs to and simply outsource all of search and search marketing to Google. Yahoo has a little over 13,000 employees today (taking into account the recently announced layoffs) – so nearly 1 in every 3 would leave.
TechCrunch – Yahoo Board To Determine Fate Of Company Today, February , 2008
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