Posible options for Yahoo to avoid Microsoft

In midst of the $45 billion (£23 billion) hostile bid from Microsoft, Yahoo is looking for all possible options. Yahoo is most likely to turn down the Microsoft Corp’s 44.6 billion takeover offer as reported by San Francisco Chronicle. So what are the options for Yahoo?

Well, one option being explored is to restart merger talks with AOL - the online business owned by Time Warner group. Although Yahoo! and AOL previously failed to join forces because of differences over price, but with Microsoft eying Yahoo this could be the right time to look for an AOL alliance. On the other hand tie-ups with groups such as Google or Disney are also being considered by the yahoo board.

A partnership with Google may allow Yahoo to outsource its search service, shedding the costs of running its own search engine and sharing ad revenue with its larger rival.

In my opinion, the Microsoft-Yahoo deal has its pros and cons.
Google doesn’t want this Microsoft-Yahoo alliance to go through for sure as Microsoft and Yahoo together equals the majority of instant messaging and email accounts – so coming together they will have like a monopoly over the email, IM and web services. But on the other hand Google does carry an unhealthy dominance in online advertising and web searching – so we need a competition there for sure which this alliance will bring about.

One thing is clear: Yahoo is running out of time, and will need to decide whether it will accept Microsoft’s bid or try to partner with Google or AOL soon. Yahoo’s annual shareholders meeting is in May 2008 and a decision needs to be made before that.

Friends do post in your view/ comments on this deal and its impact.