In a letter addressed to Yahoo!’s shareholders, Jerry Yang the chief executive of Yahoo! Inc seems to delve into the reasons behind rejecting the Redmond giant’s bid.

The refusal to accept the offer came in the wake of Yahoo! looking forward to cash in on this huge opportunity of the global online advertising’s growth. “We have a huge market opportunity – and are uniquely positioned to capitalize on it” said Mr. Yang. “The global online advertising market is projected to grow from $45 billion in 2007 to $75 billion in 2010. And we are moving quickly to take advantage of what we see as a unique window of time in the growth – and evolution – of this market to build market share and to create value for stockholders.”

Moreover, the letter suggests that Yahoo!’s board of directors is on the move to assess all strategic options before the company. The chief also talks about the company’s unique combination of strengths which includes a strong brand, several popular online services, a leadership position in display advertising, search advertising, mobile and online video.

Referring to the company’s positives, Jerry terms Yahoo! to be a “faster-moving, better-organized, more nimble company” than it was just a few months ago. Furthermore, that Yahoo! has now redeployed its resources to drive it’s key strategic priorities and is in the process of taking crucial steps to streamline the organization and close down or spruce up the businesses which are not supportive of its growth initiatives. The upbeat tone of the letter emphasizes that the company’s well on our way to “transforming” the experiences of users, advertisers, publishers and developers.

Moving ahead, the letter points to Yahoo!’s important investments in its core computing infrastructure which has enabled them to increase the speed of their search engine updates and handling vast and growing quantities of data at the same time.

“In addition, we have the added value of our substantial, unconsolidated investments in Japan and China” says Mr. Yang. “We have substantial positions in Yahoo! Japan, the leader in its market, and Alibaba, which is strongly positioned in China, a market with enormous growth potential.”

It further stresses on two objectives of the company, Starting Point Objective and the Must Buy Objective.

The Starting Point Objective entails increasing visits to key Yahoo! starting points and properties at the rate of 15% a year. And that Yahoo! experienced double-digit growth in U.S. users in 2007 on home page.

Directed at making the company a “must buy” for advertisers, the Must Buy Objective entails, Yahoo!’s efforts to make online advertising easier and more effective for marketers, opening up new ways for them to connect with consumers.

One of the strategic options Yahoo! seems to be considering, is a relationship with News Corp. You can explore all the events which have taken place since the bid first came up here.


Navneet Kaushal is the Editor-in-Chief of PageTraffic Buzz. A leading search strategist, Navneet helps clients maintain an edge in search engines and the online media. Navneet is also the CEO of SEO Services company PageTraffic which is one of the leading search marketing company in Asia.