Should Apple Just Buy Yahoo!?

Apple (NASDAQ: AAPL  ) and Yahoo! (NASDAQ: YHOO  ) are reportedly discussing expanding their relationship.

Wouldn't it be wild if Apple's next move was to put a ring on it?

Let's be frank. The chances of Apple and Yahoo! hooking up are slim. Yahoo! turned down Microsoft (NASDAQ: MSFT  ) at a much higher price point several years ago, and the stock's been a market darling since Google (NASDAQ: GOOGL  ) executive Marissa Mayer took the helm after a long line of unsuccessful CEOs.

However, each company would have plenty to gain by warming up to the other.

Folks "briefed on the matter" are telling The Wall Street Journal that the two companies are discussing ways to prominently integrate more of Yahoo!'s services on Apple's iPhone and iPad devices.

That's a no-brainer. Yahoo! already provides some of the default iOS apps for stock quotes and weather. Perhaps more importantly, Yahoo! isn't Microsoft or Google.

Mr. Softy and Big G are Apple's two biggest rivals, though these days Google has become the bigger enemy as Android conquers the smartphone and now tablet markets. Apple tried to distance itself from Google last year, going with a homegrown default solution to Apple Maps.

Right. We know how badly that played out for Apple. Any bone that Apple could throw Yahoo! is one less bone that it would either throw out to Google or possibly mess up on its own.

Yahoo! could also use Apple. Forget Yahoo!'s recent buoyant stock price. Ever since Yahoo! struck a deal to outsource its flagship search business to Microsoft Bing, revenue growth has been stagnant and Yahoo!'s been shedding market share. There isn't a lot that Yahoo! can do to change that. It struck a deal for its search portal to be Bing's trophy wife for the next 10 years, and folks will naturally wean themselves off of Yahoo! to get their results directly from the source. Yahoo! knows this. It lived through it when Google powered its queries.

Let's cut to the chase: Apple may find itself offering a search product to remain competitive with Google without assisting the enemy. Why not dust off Yahoo!'s cobwebbed yet once-effective search technology? This would likely violate the terms of Yahoo!'s deal with Bing, but obviously there has to be a way out -- and a shotgun wedding with Apple may do exactly that.

Apple would benefit from nearly every aspect of Yahoo!'s wide array of online properties and Asian investments. Yahoo! would benefit from being a part of the world's most popular mobile operating system outside of Android.

Don't run off to check the bridal registry. A deal isn't really likely to happen. However, under different circumstances, Apple and Yahoo! would've looked so good walking down the aisle at a point when Apple investors need a spark and Yahoo! investors need growth.

It's a battle for the crown
It's incredible to think just how much of our digital and technological lives are almost entirely shaped and molded by just a handful of companies. Find out "Who Will Win the War Between the 5 Biggest Tech Stocks?" in The Motley Fool's latest free report, which details the knock-down, drag-out battle being waged by the five kings of tech. Click here to keep reading.


Read/Post Comments (5) | Recommend This Article (8)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On April 10, 2013, at 8:16 PM, lee654 wrote:

    Apple should buy Yahoo and Nokia !

  • Report this Comment On April 10, 2013, at 9:30 PM, skitz2004 wrote:

    Yahoo is broken already so why completely kill it off by Apple buying it?

  • Report this Comment On April 10, 2013, at 9:42 PM, laethyn wrote:

    No. Absolutely not. Yahoo is at a near 5 year high and by all indications, isn't done movin' up. Sure, they've updated a few of their properties recently. Mail, the new homepage, partnering with G for ads, the new top of the line flickr apps. They still have quite a few properties that, once updated, will make some really big differences in my opinion.

    @skitz2004, I disagree that Yahoo is broken, but to each their own I guess.

  • Report this Comment On April 10, 2013, at 9:53 PM, mfooljdg wrote:

    A lot of Yahoo is an advertising support system which is antithetical to the Apple experience.

  • Report this Comment On April 22, 2013, at 2:19 PM, Johnnyrcode wrote:

    Please God let this happen in the next few weeks. In Jesus' name amen.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2356192, ~/Articles/ArticleHandler.aspx, 11/26/2014 9:23:59 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement