Why Yahoo Should Sell Itself to Microsoft.(or Google)

Yahoo is caught in an enviable position, between a rock and a hard place, of Microsoft and Google.

About a decade ago, Yahoo was the wunderkind. No one had anything like its search engine. One problem was that it was a little ahead of its time. Few people fully understood the value of search engines. Another issue was that it was just another tech stock; one that went boom in 1999, then bust in 2000. (Google was fortunate to come of the scene afterward, and avoid this.)

By the time Google made its mark in the early 2000s, Yahoo was "old news." It had not made anything of its head start, and was outpositioned by a younger, more nimble company. So much for first mover advantage.

The latest news is that Microsoft, the industry giant, has now come up with a credible alternative. It is the last entry in this space. but the one with the strongest backing. That's because Microsoft is a much more established company that isn't only about search engines. It's basically about software control, of which search engine is just one application.

Yahoo is in an unenviable position, trapped between a larger producer of its main product, and a smaller producer that's a much larger company overall. These two companies are about to go to war. As Machiavelli advised about 600 years, ago a (prince) in such a situation "must declare for one or the other, or else become a prey of the victor."