Yahoo brand needs an overhaul; Microsoft won't help

After three years, Microsoft revisits bid for Yahoo at half the price

If Microsoft does buy Yahoo, the combo could deal the coup de grace to that other failing internet giant of yesteryear, AOL.  Then again - given Yahoo's paltry progress - one can't imagine why Microsoft would spend billions on a company in decline.  

Whether the two would or should come together has been on everyone's mind of late after it was reported that Microsoft was back at the table three years after its first attempt to buy Yahoo, though Microsoft quickly denied any truth to the rumors.

Still, it hasn't stopped the press corps from speculating on the combination. After all, Microsoft and Yahoo have a history of love-hate relations and the idea of the two marrying is as intriguing as surprising. 

It all seemed to start around Microsoft's unsuccessful 2008 bid to acquire Yahoo for $44.6 billion, twice as much as Yahoo's current market cap of $20 billion. Then with last year's announcement of the integration of Yahoo search and Bing, the two showed they're prepared to do business. This deal is mutually beneficial, giving Yahoo 88% of advertising revenue and significant boost to Bing's ad exposure. Now there's the latest rumor of a potential tie-up.

Yahoo and Microsoft are sort of like a will they/won't they couple -- the tech industry's equivalent to Ross and Rachel.

So with all the latest he said-she said reports, what are we to think?  

My take is that Yahoo should base its decision on how committed they are to innovation and redesign. And judging by the past, they aren't very. It would require an overhaul not just of how Yahoo looks from the outside, but their core philosophy concerning tech innovation.

It's unclear whether Microsoft could have that commitment. A full commitment to overhauling a brand and product means a "full" commitment to what Yahoo's brand and product means to consumers, not what Yahoo could do for Microsoft. 

The biggest risk in this endeavor would be Yahoo's considerable presence in online media, as opposed to tech, an area where they can't compete with Google. If the deal happens, it should be a careful calculation of risk management (in terms of Yahoo's considerable media empire) and "jump in with both feet," (in terms of their dire need for a fresher tech profile.)

The brand needs to exude the sense a total overhaul to reflect a more current option to the Google Industrial Complex, while still hanging on to its strengths in the media arena. Whether this can be best achieved by selling to Microsoft or not is beyond my own powers of speculation. But my guess is it won't be.

[Image Credit: teamaltman.com]