You've heard this before: as media companies look at the expanding digital broadband universe, they're faced with the question of whether to build or buy their way forward. Perhaps no company
represents the "buy" strategy better than Yahoo. From Yahoo Search, which was pieced together with Inktomi, AltaVista, and Overture's technologies, to recent purchases like Flickr, Del.icio.us, and
most recently JumpCut, Yahoo has always had at least one eye focused on making its services stickier for users. And of course, the most recent speculation linked the Sunnyvale Calif. Web giant with
buying the popular social network Facebook for $1 billion. BusinessWeek says Yahoo's acquisition-madness has a definite method: bigger, more targeted audiences and broader, more engaging services.
Toss Dagres, a VC and partner of Boston's Spark Capital says Yahoo's acquisitions will soon payoff. "If you take these smaller brands and you plug them into the Yahoo ad infrastructure, they should
quickly increase the ad revenue for them," he said. Remember, Facebook excluded (and that one is still hanging in the air anyhow), Yahoo's recent string of acquisitions haven't cost much. And they all
have one thing in common: they're social media-oriented. Adds Dagres, "Google has taken a big chunk out of the paid search area, [Yahoo has] to make sure that [it's] strong in other areas." Google
hasn't yet made an aggressive push into social media, so it's Yahoo's to win if it can be savvy about it. And acquire a major social network, like Facebook.
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