With or Without Yahoo! Part II

This morning I tried to read the tea leaves. I’ve been studying the stocks of Yahoo, Microsoft, and Google to see whether Wall Street knows more than Silicon Valley.

Looking at the Stocks

Not much can be said for sure. At first it looks like the financial specialists don’t know much more than we do about the probability of Microsoft winning or losing the Yahoo-Blitzkrieg:

1. Yahoo went up.


2. Google continues its course (falling) like nothing has changed.


3. Microsoft continues its course (falling) like nothing has changed.

The fact that Yahoo’s stock has risen is intriguing. Apparently, to a financial analyst it doesn’t matter whether Google or Microsoft wins. The Yahoo stock wins in both cases. Why?

Looking at Brand Architecture

Let’s briefly look at each companies’ brand architecture and look what would happen if those architectures get radically (Microhoo!) or strategically (Yahoo & Google) combined:

1. Yahoo’s brand architecture is a mess. No one knows what they have or how it’s structured. It’s one reason why Yahoo has started to decline.


2. Google’s products follow a flat hierarchy that is technically and logically structured by their core competency: search. They continuously optimize the sub-menu on their start page to mirror the current state of their portfolio. The most important Google products are known to their target audience (Google Seach, Adwords, YouTube, and GMail).


3. Microsoft proves its interactive brand illiteracy with the failed “Windows Live” chimera. As I pointed out several times, it is a total branding disaster. Instead of using technology to structure its portfolio (like Google), they rename strong products such as Hotmail or Messenger with a paperish top-down umbrella nomenclature.

A) Teaming Up With Google

If Yahoo and Google join forces, Yahoo will suck energy through Google’s power plug. Hopefully they’ll learn from their younger brother how to clean up the backyard. The Google-Yahoo alliance could help both companies corner and beat-up their mutual bully. Google needs a strong Yahoo to defeat Microsoft.
If Microsoft loses this battle, their foul online product alias “Whatever Live”—according to M. Arrington, “a train wreckage”—will decompose at an even faster pace.

B) Teaming Up With Microsoft

Let me reassure you that a Microsoft merger willtear Yahoo apart. There is a simple brand and information architect’s logic to my argument:

1. Microsoft is a mess because it’s nearly impossible for them to clean up their brand and information architecture. They continue to increase the complexity of their obsolete pyramidal structure. If they compound the pyramid with the same badly structured information architecture of Yahoo, the mess can only get worse.


2. Not only do brands need an inspiring integration figure (which Microsoft lacks since Gates went), they need a clear brand architecture (which Yahoo and Microsoft lack).

So why do financial specialists consider Yahoo the only sure winner of this war between Google and Microsoft? Probably there’s some speculative trick on how to get money out of a grounded Yahoo that I don’t know about…