Many industry insiders have speculated that Yahoo would waste no time in striking a deal with Facebook on the heels of Monday’s acquisition of YouTube by rival Google. Negotiations between Yahoo and Facebook, however, appear to be losing steam.
Behold my complete and utter lack of surprise.
A Wall Street Journal article today highlights the slow-moving, and at times tenuous negotiations between Yahoo and Facebook. While Google wasted little time in its acquisition of YouTube, it appears talks between Yahoo and Facebook have been in progress throughout most of the year with still no imminent agreement on the horizon.
This is yet another sterling example of Yahoo’s apparent inability to conduct meaningful business negotiations with other companies.
Yahoo seems content to rest on their e-laurels for the time being, displaying no sense of urgency to come to an agreement with Facebook. To quote the WSJ report, “there’s not a tremendous desire on either side to get a deal done.”
These negotiations could cause one to wonder how serious Yahoo is about breaking into the social networking marketplace.
Let it not be understated, however, that Yahoo is a giant clearly when it comes to providing web services. A report in Information Week proclaims Yahoo! Messenger atop the list for instant messaging services according to the J.D. Power and Associates rankings.
Additionally, mail.yahoo.com is an ever-present staple at or near the top of the Internet’s most visited domains.
Nevertheless, the argument here is not an issue of services but of advertising.
More to the point, it’s a matter of advertising revenue.
This week Google acquired YouTube and Microsoft signed a partnership agreement with Blinkx, ensuring both companies a distribution market for their search advertising features.
Yahoo needs to find the same kind of pre-existing consumer base to implement their search marketing features to the highest potential.
Looking at the fiscal aspect, Yahoo will probably have to shell out close to $1 billion to obtain Facebook if the two parties can come to terms on a deal. That price could be a steal when you factor in that Google had to pony up $1.65 billion to acquire YouTube.
It will remain to be seen whether the two sides maintain an interest in pursuing these negotiations.
Yahoo has a real chance here to market its brand to the next generation of consumers. It remains to be seen whether or not the company will take the opportunity.
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Joe is a staff writer for Murdok. Visit Murdok for the latest ebusiness news.
