Should Apple Consider Buying Yahoo!?

PC World columnist JR Raphael notes the various rumors that Apple (AAPL) is getting into the search engine business. After noting that the world doesn’t need another search engine, he suggests:

If you must get into search, buy Yahoo! (YHOO). Please.

Speaking of [Jerry] Yang, there's a floundering search engine with a well-known brand just waiting to be bought. If Apple really wants to get into search, maybe it should consider snatching up Yahoo! for the $4.99 price tag it likely holds at this point. Sure, Yahoo! isn't exactly prime real estate at the moment -- but it has the potential to be, if people who knew what they were doing were running it. And while the word "success" hasn't been uttered for years at the Yahoo! headquarters, the site does still have a sizable amount of users. Plus, if Apple were to buy it, we could finally stop having to hear all the silly announcements and proclamations about "the great new service" or "fantastic deal" Yahoo has in the works -- you know, the one that's really going to turn things around this time.

Apple isn’t going to buy anything as big as Yahoo!, let alone acquire a sinking ship.

In 1997, a troubled Apple did sign a deal with big bad (rich) Microsoft (MSFT) to cooperate on software applications and accept a $150 million equity investment.

So it’s plausible that Apple might do a search deal with Yahoo!: Steve Jobs could strike a hard bargain on the revenue share — a better deal than it would get with Google (GOOG), since (other than iPhone on-deck real estate) Apple’s too small to have much bargaining power with the Monster of Mountain View. Apple also has the resources to bring some technology to the deal — just enough so that the iPhone search experience (or Mac?) will be different from what Yahoo! Mobile provides to other phones.

Comments

[Jon T:]

In other words: "I have no idea whatsoever what I'm talking about"....

2008 Nov 16 08:21 AM

[pendolino:]

you're not making any sense at all here. google is the de facto search engine and for Apple to partner with a dying brand with all the risk involved could be crazy.

just considering the excellent maps app on my iphone: can a Yahoo product really replace that?

im not one to believe in monopolies in the style of Microsoft and Google but until there are better options, dont mess with the formula.

2008 Nov 16 09:13 AM

[Network Effect:]

how about Skype? makes sense on so many levels.

2008 Nov 16 09:57 AM

[Jow Bloggs:]

Yahoo suffer from very poor PR and weak management, the person best qualified to sort this sort of mess out and leverage a benefit for both shareholders and users is Richard Branson. He may be a bloody clown but he knows how to take on the big boys in games he doesn't fully understand and break their iron grip. Monopolistic tendancies are something he is good at combating. Yes it's a good question, would the Yahoo brand be able to live under the Virgin label?

2008 Nov 16 10:00 AM

[User 283977:]

Apples strategy is probably mirrored by who they just hired from IBM....

2008 Nov 16 11:33 AM

[sgmsg:]

Yeah Skype could be a pretty good idea. Apple is now in the market phone .
Skype and Apple can make a good synergy. this way a new iphone/touch only wifi (no edge no 3G) could produce big money.

About yahoo. Google made Android to be less dependend of computer market. The future of technology is mobility. Yahoo isn't the dominant and this sector don't lead anymore. So why buy Yahoo? Microsoft was wrong in their project of buying Yahoo. (And Yahoo was wrong to avoid this buy.) Why Apple has to make the same mistake of Microsoft?

Apple could deliver some similar products of Yahoo via Itunes. No need to buy Yahoo.

2008 Nov 16 11:45 AM

[Fremont Rea...:]

some very interesting comments,

if AAPL were to buy Yahoo, they could bring clarity to Yahoo's messaging , and simplify their UI, however AAPL would need a search engine preceived to be better than Google's to make it work. The big problem is that it may divert too much attention from what they currently do it's natural progression towards a mobile knowledge communicator. A small box that we uses to make telephone and data communications and which we plug into a docking station to deal our everyday business and home work.

on buying skpye, makes no sense the margins are tough and would be cheaper to get into and more profitable to do partnership deal with Skpe or another.

2008 Nov 16 12:01 PM

[mollytjm:]

yeah...i can just see Jobs and Yang 'cooperating'..maybe in another lifetime. i don't see Yang going down without a battle.

2008 Nov 16 12:02 PM

[bob.moneybags:]

i just bought a new mac book pro....my first apple. i was suprised to see that when i oepned up apple's browser for the first time, it had yahoo as the default search engine on the toolbar, not google. it does have googlemaps on the toolbar, but not google search. very interesting.

2008 Nov 16 06:17 PM

[Brandon:]

Yahoo was never a search engine. It was a topical directory. Yahoo's big mistake was transforming itself into a search engine, even though their system won them the search wars before Google ever existed. I still prefer searching that way but the directory is buried on the front page and unless you know where to look no one will ever use it. Searching for things on Google gives you the same problems that all of the old search engine's gave you. You get all kinds of random stuff that has nothing to do with what you wanted.

My suggestion to Yahoo.....go back to the system that made you a success, while it will never bring you back to the glory days of old it will at least stop the bleeding.

2008 Nov 16 07:46 PM

[PalinTologist:]

Brandon, I think your distinction that Yahoo is a 'topical directory' as opposed to a 'search engine' is right on; I never really thought about about that before frankly. So true! Makes me wonder though: is a 'topical directory' something we need anymore? If Yahoo got back to their roots and leveraged its original reason for being, how much would that be worth to a surfer and more to the point, the market?

2008 Nov 16 11:41 PM

[grishick:]

Quit writing nonsense and post your long/short disclosure.

2008 Nov 17 02:54 AM

[kris23:]

Hmm I doubt Apple would ever buy Yahoo! but I do believe that Yahoo! is a diamond in the rough and I definitely think it has potential under the right management. Even though Yahoo!'s price has dropped steadily, there are the few that have remained bullish about the company. 64% of users (www.predictwallstreet....) think Yahoo! will close up and sentiment is slowly becoming more bullish for the company. Once the economy turns up, I think Yahoo! will have more of a chance.

2008 Nov 17 12:47 PM

[greenskyrocket:]

No. Apple should buy Sony (SNE)

2008 Nov 19 02:19 AM