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Monday, May 07, 2007

Cisco a Better Fit for Yahoo

Forget Microhoo, it's time for Ciscoo!

There were rampant rumors last week about Microsoft wanting to buy Yahoo, but I'm skeptical that that will happen because there is too much overlap, and Yahoo is too strong to let itself be weakened (yes, weakened) by Microsoft.

While Yahoo's profits are down the company still is a much stronger brand and has a more forward thinking vision for digital media than Microsoft. Cisco, which is moving from networking hardware into Internet services and software, is a much better fit.

Cisco has been in acquisition mode, with WebEx and Five Across among their recent purchases. Today Cisco announced a new streaming video service for media companies, which is among the places that Yahoo wants to be a leader.

It's a marriage made in heaven -- the companies are Silicon Valley neighbors that complement each other and have very little overlap. Cisco's IP networking expertise combined with Yahoo's reach and content and social networking services would open Cisco up to a world of new customers.

So perhaps the Microhoo rumors were intentional to let Cisco know that Yahoo could be had and generate some interest in the company. Cisco is 4 times the size of Yahoo, so they have the money to make it work. Together they could be a nice balance to the Google juggernaut.

By John Gartner at 12:17 PM | Comments (0)

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