I have written once before on how Yahoo (YHOO) was making some good moves in terms of phasing out unprofitable lines of business and increasing focus on core business functions.
Monday it was announced that Yahoo CEO Terry Semel had resigned and would be replaced with Yahoo founder Jerry Yang. Investors initially cheered this news but then apparently concluded that Jerry Yang did not represent enough of a change. The stock ended yesterday down 1.7%.
The bloggers and analysts are now speculating on potential directions for Yahoo. Mergers with or acquisitions by Time Warner (NYSE:TWX), Microsoft (NASDAQ:MSFT) and the other usual suspects have been mentioned.
My opinion is that Google (NASDAQ:GOOG) should spend some of their billions and acquire Yahoo. The two companies are completely complementary. Google offers the dominant search and online advertising platforms on the web. Who needs Yahoo's Panama when you can sign up with Google?
Google realizes they need to augment their presence with more content; hence, the purchase of YouTube. Yahoo has tons of content. They are the most visited site on the web. Their financial, email, news, shopping, Flickr photosharing site and other features are far more popular than similar features offered by Google.
Why should these two companies compete head to head when a combination would create an Internet powerhouse? Come on, Google! Buy Yahoo and get it over with.
GOOG/YHOO 1-yr comparison chart