Yahoo AOL Merger Is a Bad Idea

It is reported by the Wall Street Journal that private equity firms together with AOL are looking to merge AOL and Yahoo. We have disputed at one time that there is a need to take decisive actions to boost Yahoo’s stock price, and failing that private equity should look into buying Yahoo, and merging these two companies AOL and Yahoo, who are fundamentally and secularly challenged companies, is a bad idea. We know that two wrongs can never make a right. Any attempt by a private equity firm to buy Yahoo! or merge it with AOL will force MSFT (Microsoft) into making a full offer for yahoo.

There are several reasons why merging Yahoo and AOL is a bad idea:

• This idea is bad due to that fact that there are no obvious scale benefits to merge these two companies in display, research or social networking.
• Getting Yahoo’s board to agree to this will be tough although given the disasters handling of the Microsoft offer; they may be forced to seriously consider this one.
• AOL is partner of Google and Yahoo is partner of Microsoft, and both are long term contracts.
• Cost synergies will not be accretive that are adequate to add material value to the merged entity.

The fact is that both companies particularly Yahoo have failed to show any persuasive proof that they understand what the real-time web is about, or how they are going to get from where they are (which particularly in AOL’s case, is not a good place), and where they need to be in order to take advantage of that basic shift in the web functions. It’s true that both companies still have millions of unique monthly visitors, and advertising-based businesses that cater to those clients, but the future of that kind of platform is hazy.

Nokia – Yahoo, A Cool Deal

Yahoo! Inc is preparing a deal with Nokia Corp. and they have signed the contract for their cool strategy to enhance their mobile internet offerings.

As Yahoo has already been popular chat and email service mostly in Asia but through this deal they want to extend the scope and presence in these countries. In the same way, Nokia is one of the most popular mobile phone manufacturers that are trusted by public for their reliability and excellence. This is the quality that attracted Yahoo! Inc. to make business deal with Nokia Corp. This deal is an attempt to develop the popularity and use of Yahoo services on Nokia phones that is most preferred item of every phone user in Asian countries. Yahoo! Inc. believes that through this strategy they would be succeeded to make the Yahoo mail and chat service like a household feature to everyone and they would be able to gain more penetration in more areas where it is not much developed. Moreover, it is a cool idea to take back the position with their competent i.e Google and Apple.

Though it is really a solid market strategy to Yahoo! Inc. but Nokia Corp’s concern seems dubious yet. Nokia is the competent of world’s most popular mobile phone company Apple Inc., RIM and Google and they strived a lot in highly competitive innovative smartphone market. Let’s wait and watch what if they get to make good approach in partnership agreement with each other not.