What’s next for Yahoo?

Amy Scott May 5, 2008


Scott Jagow: Yahoo is living on the edge with its shareholders. This weekend, Yahoo rejected a higher buyout bid from Microsoft. And Microsoft said, “OK, see ya later.” That prompted a lot of Yahoo investors to part with their shares. Yahoo’s stock is down 19 percent this morning. Amy Scott tells us what might be next in this saga.

Amy Scott: With the Yahoo deal scuttled for now, analysts say Microsoft will look for a new partner. The software giant wants a bigger piece of the online advertising market. Clayton Moran tracks the industry for Stanford Group. He says a deal with a company like AOL, Fox Interactive, which owns MySpace, or CNET could help Microsoft compete with Google.

Clayton Moran: AOL’s the next biggest player. They do bring some size, they bring scale, they bring a decent brand name.

But AOL may also have another suitor — Yahoo. Then again, Yankee Group analyst Laura Didio says if Yahoo can’t sustain its recent growth, it may not be too late for a Microsoft-Yahoo deal.

Laura Didio: Microsoft could circle back around and get them for a more reasonable price towards the end of the year.

Stanford Group’s Clayton Moran says for now Google is the big winner. Its two biggest competitors remain separate. And Yahoo may be under pressure to expand its advertising partnership with Google.

In New York, I’m Amy Scott for Marketplace.

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