Apple’s Next Move; Buy Yahoo

It seems like only yesterday when the world wasn’t quite so complicated. When good vs. evil was as simple as Apple vs. Microsoft. With the rise of the Internet came the birth of a whole new paradigm of communicating and sharing information. Proprietary software has new open source challengers that are surprisingly refined while continuing to expand their capabilities. Client/Server gave way to Web based user interfaces and the deliver of legacy software is giving way to the cloud. The desktop has been replaced by the laptop, the cell phone became a mobile device, and Apple has become a powerful force within computing, music, video, mobile devices, and more. However, once again the world has changed and Apple must adapt to face a new challenge; Google.

Once upon a time Apple and Google were friends with a common enemy and clear boundary lines. Today, those lines have been crossed and they are headed on a collision course. Apple didn’t start this skirmish, but they did create an inflection point that has become a clear threat to Google’s future. The rise of OSX, iPod, iPhone, iTunes, and now iPad, flew in the face of Google’s Internet vision centered around their cloud. Google risked losing control of the end-user platform and the advertising revenue they covet; they had no choice but to stop Apple’s momentum. Therefore, Android, Chrome, and Chrome OS were born.

While Google is on the offensive, Apple continues to chart their own course. However, this changed when Google released the Nexus One and then snatched AdMob from Apple’s hands forcing them to settle for Quattro Wireless. This skirmish is now an old fashion feud and may escalate into an all out war. Maybe that’s why Schmidt met with Jobs last Friday to attempt to deescalate the situation, but remember that Jobs never yielded to Gates. If Apple wants to attack Google, then look no further than Yahoo as a perfect takeover target.

Apple would not be buying Yahoo for search, that’s Microsoft’s problem. Instead, Apple would be gaining a cloud and advertising platform for which they could re-launch current Yahoo services, build on Yahoo’s mobile and location based strategy, and integrate current Apple offerings. Imagine a new Yahoo that has been injected with Apple’s DNA and provided innovative services and content for Apple’s computing and mobile products. How about a cloud based iTunes Store, the merging of Flickr with iPhoto, or Time Capsule based back-up in the Cloud. I shutter to think how Apple could redefine and reinvigorate Yahoo.

Consider this, Yahoo is still the third most popular website on the United States. Yahoo’s problem has never been visitors, instead it has always been the monetization of their incredible content. Does anyone doubt Apple’s ability to introduce new and innovative business models to the market? Additionally, Yahoo’s Fire Eagle location-based service would be downright explosive in Apple’s hands.

As Jobs rightfully stated, “We (Apple) did not enter the search business. They (Google) entered the phone business.” Now is the time for Apple to take their massive following, passion, and ability to invent ground breaking intuitive technology and attack the advertising revenue that is at the heart of Google’s dominance. The centerpiece of such an attack is the purchase of Yahoo serving as a catalyst for Apple’s continued domination of the mobile space.

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One Response to Apple’s Next Move; Buy Yahoo

  1. cremes says:

    This is a great opportunity for a pairs trade. Go short Apple and go long Yahoo.

    cr

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