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TELECOMS AND SOFTWARE NEWS
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Yahoo CEO steps down: time for Nokia to pounce?
Tony Cripps
Yahoo CEO steps down: time for Nokia to pounce?
Yahoo's future remains in the balance following the stepping down of CEO and co-founder, Jerry Yang. This follows its snubbing by erstwhile acquirer Microsoft and the collapse of a proposed advertising deal with Google. While Yang's absence may re-open the door for Microsoft, Yahoo's low valuation plus its brand and considerable consumer support, especially stateside, suggests that a different suitor should step forward: Nokia.
Yahoo may be down but its inherent value remains intact
Microsoft's recent denial of any interest in re-opening takeover discussions with Yahoo would appear to rule it out as an acquirer. Were it now to step in as a white knight, surely such statements would lead to accusations that Microsoft was deliberately posturing to drive its rival into corporate purgatory before pouncing? Microsoft's original offer of $31 per share in February valued Yahoo at around $45 billion. With Yahoo shares currently around a third of that, the company could represent a good investment for another company looking to grow its web presence - especially a cash rich one, given the current financial climate.So which companies might be interested in buying Yahoo? Google seems an unlikely bet. The loss of its deal to supply advertising to Yahoo's US operations on competition grounds will have been a blow to Google's overt aim of putting advertising in front of as many users as possible, as often as possible. However, the company would not benefit to any great extent from acquiring Yahoo for itself.AOL has also been suggested but the benefits of one struggling web company acquiring another are debatable. Nokia's web ambitions will lead it to Yahoo land_
The mobile handset giant is intent on becoming a major web player in its own right and Ovi (the umbrella for its web applications and services), as we see it today, is only the start. There's a clear imperative coming from Espoo for Nokia to become part of the fabric of the Internet and not just to build on the foundations laid by others.As a starter, Nokia will make its Nokia Maps API available to third parties. While not unique (Google Maps API is already out there), Nokia has significant assets to bring to mapping, not least through its acquisition of Navteq. And there are plans to expose further Nokia services to web developers, although it won't be drawn on them as yet.Nevertheless, reversing into the Web from a mobile point of view may not be that easy. Mobile is rapidly being subsumed by the Web; it will not redefine the Web in the way Nokia is hoping for (although that's not to say that it won't change the course of web evolution). The pace of development on the Web and its rapidly evolving capabilities as an application platform for developers and consumers are extremely rapid, especially in comparison with the modest (relative) pace of mobile development. Achieving true convergence depends on big bets
In this context, Nokia's mobile-centric viewpoint on the Web is an important, nay vital, one. But one, nonetheless, where established web players are liable to outpace it simply by enveloping mobile and other domains as a natural part of their expansion. Indeed, Google already is, while others - including Microsoft (through MSN and Windows Live) and even AOL - are beginning to execute on this reality.Yahoo's convergence story, however, is perhaps the strongest. The company has quietly put together a compelling, yet grounded, approach to extending its brand value and influence beyond the desktop, to mobile and consumer electronics, through initiatives such as Yahoo! Go, oneConnect, Blueprint and Widget Engine. In addition, Yahoo has something else that may actually be more vital to Nokia's future development - a major brand in the US. Indeed, despite its current financial woes, Yahoo remains a prime web destination in the US, having only lost its lead over Google in April, according to ComScore.All of which should make it an attractive acquisition target for Nokia; a bargain, if not actually cheap. However, Nokia is not predisposed to taking risks such as these, although its $8.1 billion acquisition of Navteq shows that it can in special circumstances. Plus there is a strong, albeit quietly assured, belief that it can become a major web player on its own terms. Nonetheless, if Nokia isn't considering buying Yahoo we can't help thinking that it will in time regret that it hadn't.
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