It's Official: Yahoo Is Available for Purchase. But Who Wants It?

Yahoo (YHOO) CEO Carol Bartz put in an appearance on CNBC yesterday during her company's 15th anniversary. There was the bravado you could expect from any CEO of a publicly-traded company trying to convince listeners why the company is doing better than many may think. However, one interesting tidbit that came out was that any company could buy Yahoo for the "right price". The question is, of the potential suitors, who would bother with an acquisition?

When asked if she would have taken the Microsoft (MSFT) offer a year ago, she laughed and then said, "Sure." Would they sell today? "Absolutely. Any company at the right price."

What would the right price be? "The point is you never know unless you're in the middle of a deal what's really happening." When further pressed on some idea of what the company is worth, Bartz said, "I'm not shopping Yahoo today, so there is no price on Yahoo today."

Nevertheless, even without a price, the company is available. That's an unsurprising answer. Unless a company is so large in size that no buyer could afford it, the CEO has to consider whether an acquisition would offer the greatest benefit to shareholders.

The problem facing Yahoo and Bartz what seems to be the inevitable comparison to Google (GOOG). "This comparison with Google is like trying to compare apples and oranges," she said. Google made a decision to focus on search, which Bartz noted is highly profitable. Only 40 percent of Yahoo's business is in search, with the balance in display advertising.

Even so, Bartz said that the market undervalues Yahoo. "CEOs don't normally say that," she said, "but we have to earn the right to get that value back. I get that." The answer would have to be "more customers, bigger advertising, and revenue and profit."

As far as improving the situation, Bartz seemed to suggest that many critics and market watchers were being unrealistic. "It's only been a year," she said. "Companies don't 'turn around' in a year. And let's look at what last year was: the worst year since the Great Depression."

I think a better description for investors would be: Impatient. They have seen a huge amount of value disappear from their holdings over time. Here's the historic stock price chart, via Yahoo Finance, over the company's lifespan:

And here's another chart showing Google's stock history since 2004 compared to Yahoo over the same period, even though Bartz doesn't think it's a fair comparison:

Bartz was right: no comparison. However, people contrast the two for a reason. Google may have focused on search, but that doesn't let Yahoo off the hook, because it's supposed to be in the same business. In fact, at one time Yahoo used Google as its search engine, providing credit and a free marketing ride that helped build the latter's reputation and business. If Coca-Cola competed against an upstart in the juice beverage category, would investors understand the newcomer becoming the segment's dominant player because Coke was busy doing other things as well?

Just because Bartz has dislodged three of Yahoo's board directors -- either stepping down immediately or not planning to run for reelection -- since coming in a year ago doesn't mean that that pressure will disappear. At most, she's found a lull.

The serious issue Bartz keeps trying to talk around is how to define Yahoo. She described Yahoo as a "content" company with "editorial presence." Given the wide range of content -- including email services, financial information, news, and social media -- perhaps the problem is that Yahoo is as unfocused as Google is focused according to Bartz.

So who would want to buy Yahoo? There isn't a long list of tech or publishing companies that could foot the price tag Bartz would likely want. Microsoft is getting what it needs at a fraction of the tens of billions it was going to pay. Neither Google nor Apple (AAPL) would have use for the site. Perhaps a publishing company would see it as a match, but who in publishing is financially healthy enough to pull off a deal?

Chances are Yahoo will continue on its own, unless it can find a more coherent value proposition for consumers other than wanting to be the center of people's online lives. Yahoo's turnaround may be a long way down the road.

Image: Original photo by Thomas Hawk. Composite by BNET.