The press continues to speculate on Yahoo's future.  Microsoft denies it will pursue Yahoo again.  Obviously I do not know about Microsoft's intentions but I would not be surprised if Microsoft returns to its pursuit of Yahoo.  Microsoft is way behind Google in the Internet wars.  Nothing else out there compares to Yahoo's scale.  If Microsoft is serious about competing with Google, it has to own Yahoo.

What about Yahoo's situation?  Jerry Yang likes being CEO of a company he founded many years ago.  He is extremely wealthy.  He is young.  What would he do without Yahoo?  While I am sure he could keep occupied, I doubt he could achieve the high he gets from running Yahoo.  His work is his life.  He does not care about his stockholders nor speculators.  He honestly believes he can make Yahoo bigger and better so to heck with what anyone thinks. 

I am not rooting against Jerry (and David Filo).  But if Yahoo is remaining independent, it needs to change its growth strategy.  18 months ago I suggested that Yahoo should purchase Dow Jones.  Yahoo needs to be the biggest and best media company.  It can never be the biggest and best search company.  The mere fact that Yahoo is working with Google to farm out its search shows the world that Yahoo knows it has lost the search wars.

Therefore Yahoo should make a big purchase.  And once it makes the big purchase it might very well be the best defense against Microsoft returning to the hunt.  Yahoo did not take me up on buying Dow Jones.  But now I suggest two acquistions.  Yahoo should purchase Cnet and follow that up with buying up all or most of IAC.  The cost would be many billions.  But Yahoo would then offer an astounding array of Internet content, services and ecommerce offerings.  Combined with Yahoo's enormous traffic, this combo would clearly be a winner.  And as stated, it would keep Microsoft away forever.

More importantly these acquisitions would make Yahoo the most interesting Internet company in the world.  I am not sure that Yahoo has the right management to pull this off.  Regardless, this plan should be considered.