Yahoo: Pondering a Disney Connection?

If Yahoo’s battle with Google (GOOG) has taught us anything it’s that the company isn’t run by engineers. Sure, Yahoo is tech savvy. Sure it has an open platform. And sure it’ll do things like plan a Widget Channel with Intel (INTC) and tout it at a developers conference. But Yahoo is really about audience aggregation–the type of thing that would make a large media company very interested.

Intel and Yahoo said Wednesday (statement) that they plan to team up to launch a Widget Channel (right), a TV application designed to bring rich Internet applications to the living room. Consumer electronics that use Intel’s architecture will offer the Yahoo Widget Engine, an applications platform that delivers widgets. The Widget Channel will allow developers to use JavaScript, XML, HTML and Adobe’s Flash.

But let’s not get technical here. The Widget Channel is really just another avenue to grab audience. And that audience is valuable. Minyanville’s Todd Harrison has a working theory that Yahoo could be sold to the likes of Disney (DIS), Viacom (VIA) or some other big media company. Why? Yahoo is more television network than technology company and that’s what initially attracted Microsoft. But perhaps there’s a better fit.

Harrison writes about his trading adventures with Yahoo and how he’s buying calls–options to go long the stock in April. He notes:

The thought process on both Yahoo trading tries was the same — in the digital media landscape, eyeballs are the new audience. In a few short years, plasma TVs, computer monitors and phone screens will serve customized content to end users as networks morph into channels in the next-generation digital experience. Through that lens, Yahoo has the largest television audience in the world with upwards of 500 million viewers. They simply need to program those pipes with content and monetize their massive captive eyeball base. Either they’ll do it — and they very well could — or someone else will step in to do it for them.

That someone else could be News Corp. (NWS), NBC-Universal (GE), Viacom, Time Warner (TWX) or Disney. Of that group Disney makes the most sense. Harrison elaborates:

The House of Mouse buying Yahoo makes strategic sense for both organizations as they prepare for the next phase of the digital age. One has digital distribution pipes throughout the world while the other has a massive library of content and an evolving medium in animation. I’ve got no edge or insight that this transaction takes place, just instinct that it’s an intuitive fit.

I’ve heard worse theories. Something to ponder as the Yahoo saga continues.

Comments

[mouth:]

Mickey Mouse does not blend in with Yahoo. The problem with Yahoo is that their wonderful assets have not been maximised and like a lot of companies they chase things that others are doing, or try and hold onto diminishing assets. Their Financial site is still years away from te competition.I have always thought that they should have set a minimum charge to all users of the financial site. I could even tell them to how to further enhancwe the site and also sell the benifits to users. But alas they will squander the benifits because they lost direction with the previous CEO(although he gained beifits. The problem is that they are trying to be something that really is beyond their business plan and management ability. A new CEO will only try and figure short term stock options beifits and the slide will continue. Kind of sad

2008 Aug 21 12:40 PM