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Yahoo's openness efforts may not find higher Microsoft bid

The company has been toiling away to get its open search platform ready for prime time, but some analysts say it may not lead to a higher buyout bid from Microsoft.

Yahoo on Thursday drove home the point that its open-search strategy will add more value to its operations, but some analysts say it's unlikely to add more dollars to Microsoft's unsolicited buyout bid.

Speaking at the Web 2.0 Expo in San Francisco, Yahoo's chief technology officer Ari Balogh delved into the Internet pioneer's transformation into an open and social platform, according to a blog by News.com's Dan Farber.

Balogh, for example, cited Yahoo's SearchMonkey, a platform that opens up its search to Web publishers and third-party developers. The CTO also touted Yahoo Open Strategy, which calls for an application platform designed to allow developers to create applications whereby consumers can store and share their selected data in a secure fashion.

"This is nothing more than an incremental improvement to Yahoo's search platform and there is no reason why Google couldn't open a similar platform."
--Jim Friedland, analyst, Cowen and Co.

According to an e-mail Yahoo CEO Jerry Yang sent to employees in February, such efforts, in part, justified Yahoo's rejection of Microsoft's unsolicited buyout bid.

Said Yang:

"Our goal is to grow visits to key Yahoo starting points and properties by approximately 15 percent per year over the next several years. And we're on the move: we are the most visited site in the U.S., and the number of U.S. users grew strongly in the double digits in 2007 on our Yahoo.com home page alone. As our open platform takes shape, it will significantly accelerate that growth."

But Jim Friedland, an analyst with Cowen and Co., said the chances of Yahoo's open search efforts driving a higher Microsoft bid is "zero."

"This is nothing more than an incremental improvement to Yahoo's search platform and there is no reason why Google couldn't open a similar platform," Friedland said.

With a low barrier of entry to an "evolutionary and not revolutionary" offering, Yahoo would not likely be able to extract a higher premium from Microsoft, even though it's expected to make the offering available in the later half of this year, he added.