Yahoo Flourishes Under Takeover Pressure

Talk about courage under fire. Greg Sterling notes that in the past few weeks since Microsoft's semi-hostile takeover bid, Yahoo has debuted seven new (or formerly incubated) initiatives, including Apex (a unified advertising platform), an open-source infrastructure for its search index, and the acquisition of Maven Networks. And let's not forget that the Web giant seriously trimmed some fat by laying off 1,000 employees.

As CEO Jerry Yang said, Microsoft's unwanted bid has been a "galvanizing event for everyone at Yahoo." The company still faces major hurdles--including various shareholder lawsuits for refusing the deal, the threat of a possible board infiltration by Microsoft, and the public perception of the brand as damaged goods.

"It's terribly ironic that it took Microsoft's bid to, in effect, wake Yahoo up," Sterling says. "And while nobody can predict the outcome with certainty, which has grown more hazy in recent weeks, Yahoo for the time being seems to be back on course."

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