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Can Jerry Yang Still Keep Yahoo from Going Under? Search Engine Marketing Trends

November 21, 2008

However you look at it, it could very well be the dumbest decision in all of Net history.

Early this year, Microsoft offered Jerry Yang, Yahoo! CEO, the amount of $43 billion to buy his ailing company. At the moment, Yahoo’s market worth is at $18 billion. Its sales are almost at a standstill and it is losing profit faster than you can say “search engine”. Executives and employees are jumping overboard like rats off a sinking ship. Lay-offs are  imminent.

Jerry Yang turned the offer down.

Internet insiders were shocked with this marketing faux pas. Many wondered if Jerry Yang is still in charge of Yahoo! Yahoo, however, stuck with Yang’s decision and said there are no regrets in the way he handled Microsoft’s $43 billion offer. The offer went through serious and deep analysis and decided that the pitifully insignificant amount of $31 per share was simply unacceptable.

All of Yahoo’s shareholders agreed that they will not sell at that amount. It was Microsoft and not Yahoo! that walked out of the negotiating table when Yahoo upped the company’s selling price. Microsoft denied the allegation and said that it happened the other way around.

Whichever version is true, it cannot be denied that Yahoo is slowly going down the tubes. With sales and profits on a steady decline, a lot of executives and employees decided to defect rather than go down with the ship.

Yahoo, however, is second to Google but still gets 141 million unique website visitor in the U.S. alone in August this year, a huge cut out of the traffic market. Globally, Yahoo comes third behind Google and Microsoft. To keep itself afloat, Yahoo keeps on jumping from one marketing ploy to another but with no visible permanent solution in sight.

Jerry Yang and fellow Stanford grad David Filo formed Yahoo in 1994. By 1998, it appeared that it was the undisputed king of the hill and by 2000, it grew by 90% with $1.1 billion in yearly revenue when Google, on the other hand, was only making $19 million. The year 2005 saw Google’s phenomenal rise and Yahoo’s fall from its throne. The new king is now generating revenue to the tune of $22 billion while Yahoo flounders with $7.5 billion.

What is the secret behind Google’s meteoric success? Simply said, Google made it big in the field of search engine marketing or SEM. Google’s search engine marketing allowed advertisers to place their ads next to keyword search results. To date, Google’s search engine marketing is the undisputed superstar of online advertising.

There has been some buzz circulating about the Internet that Microsoft shows some indication that it might still be able to reconsider Yahoo’s offer. Microsoft, however denied the rumor just as Yahoo’s shares began to shoot up. Web write-ups and blogs are filled with dark forebodings regarding Yahoo’s uncertain future, not excluding the possibility that it can be sold off in little pieces.

Only one thing is certain – Jerry Yang’s unbelievable refusal to accept Microsoft’s offer despite its continuing downward slide will go down in Internet history as the greatest decision never made.

Yahoo shares have slumped since since Microsoft made its initial offer.
The Yahoo directors agreed to accept Jerry Yang’s  resignation from the top job at board meeting on Monday. “ I will continue to focus on global strategy and to do everything I can to help Yahoo”  Yang said.

The Yahoo’s latest ambitious long-term projects like YOS – Yahoo Open Strategy may fix Yahoo’s problems and we will see their shares go up next year.But regardless of the latest Yahoo’s marketshare loss to Google it still remains one of the main and valueable Media Properties in the World Wide Web.

Written by admin · Filed Under Reviews 

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