pyehouse
12Sep/110

AOL Yahoo Merger, Doing It Wrong Online

According to a Guardian post, an AOL Yahoo merger is being considered. Yahoo is worth $17 billion. AOL is valued at $1.68 billion. You can imagine, then, the chutzpah it takes to say they're doing it wrong online. But they are. I co-own a Houston based computer support company which you've probably never heard of. It isn't valued nearly as highly. So why call these two out? Simply, they deserve it.

Yahoo seems to be going through Kubler-Ross' stage 3, bargaining, staving off the end just a little bit longer. AOL has been in decline for what seems like forever. It's like an ant's view of watching a human tumble to the ground. It must seem like eternity. In any event, now the rumor mill has it that the two Internet giants are considering merging. It seems a feeble gesture somehow. The problem isn't that either of them needs what the other has. The problem is that neither is doing the right thing with what they've got.

Both companies provide a multitude of services to their viewers. Yahoo provides myriad social and information services including their mail service. AOL provides content from many sources which they have either developed or acquired over time, in addition to their mail service. In AOL's case, they don't need additional services to beckon readers into their content-laden maw. They need to improve their content by shooting for more quality and less quantity. I don't know that anyone drops by AOL because they have the hottest stories, best blogging or most ground breaking journalism. They go there because of inertia. And Yahoo doesn't need AOL either. Instead they need to take the multitude of services they provide now and streamline them, turning them into a single cohesive experience.

No, these two companies are strange bedfellows. They have overlap in areas where merging won't help and their differences aren't complementary areas. What we're seeing is one more stage of dying. Let's hope it's relatively painless.

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