Sure, phrases like "social media" and "network effect" are overused. But when News Corp.'s
But now Google is willing to commit at least $900 million to MySpace and other News Corp.-owned sites to provide their search and advertising technology. To me, this is strong evidence of the monetization power of social media.
I also agree with Chuck on the perils of diworsification -- as does Yahoo!'s CEO, Terry Semel. On the third-quarter conference call, Semel said there were "too many priorities" when he came on board with the company in 2001, so he brought some much-needed focus. But Semel now admits that Yahoo! has indeed become unfocused again. As a result, he now plans to concentrate on three key areas: monetizing search, building Yahoo!'s lead in graphical advertising, and moving aggressively into social media, both in video and mobile forms.
Yes, Yahoo! has things to fix. But it's a lot easier to make those repairs when the market is growing quickly and there's a talented workforce, a powerful brand, and an enormous user base. In other words, Yahoo! presents investors with a big opportunity.
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Fool contributor Tom Taulli does not own shares of companies mentioned in this article. He is currently ranked 22nd out of more than 12,000 players in Motley Fool CAPS, the Fool's new stock-rating community. The Motley Fool has a disclosure policy .