Flash analysis: the future of Yahoo

1Executive Summary

Not long after reporting a disappointing earnings quarter, in early September Yahoo fired CEO Carol Bartz. About a week later, the troubled portal was reportedly more concerned with finding an investor or acquisition partner than in replacing Bartz, although the strategizing may take some time. Yahoo has seen its once-dominant online portal business model, which combines content with consumer communications and web navigation, lose momentum and ad revenues to search engines and social media. What’s a portal to do? We thought we’d ask GigaOM readers.

We posted a survey on GigaOM.com from Sept. 19 through Sept. 21, and we got responses from 105 people. Since the sample is relatively small and drawn primarily from GigaOM readers, it should not be considered representative of a broader population. But we feel that it does capture the current opinions of unbiased but plugged-in readers who know their way around technology markets.

Highlights from the survey include:

  • A third (33 percent) of the survey respondents think Yahoo would be better off trying to stay independent, but 47 percent predict Yahoo will be acquired or merge.
  • Half (50 percent) of our readers think a technology company could be Yahoo’s best partner. Over a quarter (26 percent) named Microsoft, while 16 percent called out Facebook as the best match.
  • Survey respondents overwhelmingly felt Yahoo needed the most help figuring out its overall vision and strategy (84 percent) rather than assistance in individual product or technology areas.
  • Respondents don’t think a Yahoo merger will result in a more competitive environment, but neither do they think consolidation will raise advertising prices. Almost a third (31 percent) think Google will come out ahead, and 41 percent think a merger will result in the destruction of Yahoo as a company.

At the end of this research note you will find an appendix of representative open-ended responses from the survey takers. We’ve kept their names private to protect their identity.

Relevant Analyst
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David Card

VP Research Gigaom Research

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