Rumor mill about Yahoo's future goes into overdrive

Sumi Das: Hello everybody, I'm Sumi Das for ZDnet.

Joining us today are editor and chief Larry Digman.

Larry, thanks for being with us.

Larry Digman: Any time.

Sumi Das: We're going to talk about Yahoo today,

because it seems like everybody's got a theory,

including you, about what's going to happen with this --

Larry Digman: Never-ending saga.

Sumi Das: Yes, this never-ending saga of this company.

Tell us what some of the theories are that are being

floated around.

Larry Digman: Well now I think we're really in the

trial balloon phase, where Jerry Yang is now chief of

Yahoo. They're looking for a CEO to replace him. So

you have this vacuum, and what do you do in a vacuum?

You throw something into it. And what's being thrown

out there a bunch of --

Sumi Das: You're saying this is intentional?

Larry Digman: Oh, completely intentional. I think

people are throwing out ideas, theories to the press,

mainstream blogs and otherwise, notably The Journal.

Floating some concepts of what are we going to do with

Yahoo. And you know, yesterday, the Wall Street Journal

reported that Jonathan Miller who was in the running to

be CEO at Yahoo wants to raise 28 to $30 billion, just a

little pocket change, to basically take Yahoo or at

least a part of it, buy a chunk and take it private.

The question here is, you know, would the market go for

it. I think any Yahoo shareholder that could get more

than they have today would probably take it and run.

But the question for me it whether it if you took Yahoo

private, what would you do with it. You know, would it

be acquired by visionaries or would it be acquired by

folks that are just going to strip it down and sell off

parts and saddle with a bunch of debt. Because if you

look at private equity, it's a train wreck. I mean,

they've -- they've destroyed a bunch of companies that

are now in bankruptcy just from that and other things.

So if that was the outcome, it probably wouldn't be a

good long term move. The other theory that's being

floated almost daily is that Microsoft is going to swoop

in and buy the search business.

Sumi Das: Which they keep saying that they're not

going to.

Larry Digman: Yeah, the official line is that they're

not interested in the whole company. I still think

they're interested in search, no matter what they say.

The question here is what does it look like on paper. I

mean, I think it looks pretty good for Yahoo. They

could get rid of search. Because they don't have the

resources to compete with Google. Microsoft has the

dough, they have the urge, and you know, they just want

to compete. So you know, it's going to wind up Google

Microsoft against each other in search anyway, so Yahoo

should probably just get out of the way and take a few

billion and run.

Sumi Das: What are some of the crazy rumors out there

that are just patently false -- that you think are just

never going to happen.

Larry Digman: Well, some of the CEO folks that are

being tossed out there, some of them have no media

experience, which I have a hard time seeing. I think

the private equity option doesn't make much sense at

all. In this environment I just don't see how you're

going to raise that much cash. Now, if this were a year

ago, Yahoo would be a great private equity take over

because these guys had cash out the wazoo. And they

still have cash, but now they're scared to spend it

because they're too busy messing with companies like

Chrysler and companies that are just -- aren't , you

know, they have other things to worry about than Yahoo.

So you know, but we are clearly in the trial balloon

stage, and I think people are just going float out a

bunch of theories to see what sticks. And if you throw

out a theory and Yahoo shares jump 25%, well, it's a

nice indication that you might be on to a good idea.

Sumi Das: So they're throwing out theories and

watching the stock market, that is the tactics --

Larry Digman: Yeah, traders are definitely profiting

from this stuff. I mean, you could float any theory

right now, you know, and all you need is a few seconds

of gains and you're out.

Sumi Das: It's fun to watch though, isn't it?

Larry Digman: It is. It's a very interesting stock

chart.

Sumi Das: And we can keep watching it and you'll keep

reporting back to us on all the latest. Larry, thank

you so much. For all the latest on Yahoo and everything

else happening in the tech industry you can go to

Blogs.zdnet.com.

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