Yahoo Looks Into Strategic Alternatives

Yahoo CEO Terry Semel is already out, Jerry Yang in in, but neither Wall Street nor the news media is convinced the move will spark a positive turnaround. The stock has suffered badly because it's constantly being compared to high-flying Google.

Yahoo may soon face an activist group that attempts to force the company into exploring strategic alternatives--a possible sale, merger or partnership. Should that occur, Yahoo might find itself in bed with News Corp., AT&T, AOL, Microsoft or Comcast. News Corp. in particular has been monitoring the situation, and might consider selling its MySpace unit to Yahoo in exchange for a quarter of the company. MySpace is thought to be worth nearly $10 billion--far more than Facebook. Facebook has since more than doubled its user base, and likely, its value, while Yahoo has yet to make a major move into social media.

It's unlikely that any moves will be made for a while, but an impatient Wall Street might be anticipating a quick turnaround. However, there are several synergistic problems to consider with a MySpace deal, especially the social network's ongoing search deal with rival Google.

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