Yahoo Used to be a Giant – Now it’s Down to its Last Hurrah

I’d be kind of sad to see Yahoo go under; if I can’t find something with Google, it’s always nice to have an alternative like Yahoo …

The former internet colossus is looking increasingly tired and predators are already circling

Will somebody please put Yahoo, the fading internet star, out of its misery? The Silicon Valley company, destined to labour in the shadows of Google and Facebook, recruited Goldman Sachs this week to defend itself against circling predators. Top name in the bidders’ frame is AOL, another blast from the Web 1.0 past.

As far as Yahoo shareholders are concerned, it’s deja vu – and not in a good way. Microsoft tried to buy the company back in 2008 for $33 a share, making it worth $47.5bn. In a spectacular display of egotistical boardroom intransigence, Yahoo’s co-founder Jerry Yang, who styled himself at the time as “chief Yahoo”, dug his heels in, insisting the firm could prosper independently.

Yahoo’s shares have since dwindled to just over $16, valuing the business this week at $22bn.

Yahoo is the online version of a branch of TGI Friday’s. It has a long menu of offerings, all of which are passable, but none of which are going to trouble the Michelin Guide’s inspectors. Its mish-mash extends from email to finance, news, instant messaging and mobile services, but Yahoo simply isn’t at the vanguard of online innovation and, despite an advertising tie-up with Microsoft, it has failed to create an advertising platform to threaten Google’s.

Carol Bartz, the former software-company boss brought in to revitalise Yahoo at the beginning of 2009, has become more renowned for her fruity language than for her strategic brilliance. She has appealed for “some friggin’ breathing room” and says she can’t simply sprinkle “fairy dust” to revive the big Y. But patience is wearing thin – investors are eyeing a sale of Yahoo’s valuable stake in Chinese e-commerce company Alibaba, thought to be worth some $7.5bn, to release funds.

Bartz has shed non-core assets and struck a few tidy alliances – including a partnership with Nokia. Silicon Valley, though, is a brutal place and Yahoo looks increasingly tired as an independent player. © Guardian News & Media Limited 2010 | Use of this content is subject to our Terms & Conditions | More Feeds

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