Yahoo at a strategic dead end

As the FT reports now that the Google-Yahoo search deal is off Yahoo is at a strategic dead end.  The big problem is that despite being at the centre of the biggest transformation in media for generations by next year it will have been through four consecutive years with virtually no increase in it’s cashflow – according to Citigroup analyst Mark Mahaney.

This year has seen Yahoo’s options disappearing one by one, but interestingly none of them were very exciting in the first place.  Now everyone is saying that Microsoft looks like the only option.

The options that have disappeared/are disappearing have all been at the corporate level – selling off holdings in Asian internet businesses and a deal with AOL.  The tragedy of this is that despite making a string of interesting acquistions from RightMedia through to Flickr there is nothing coming through from the business.

Yahoo’s history of poor execution is not new news, but looked at alongside AOL’s difficult position it is clear that the first wave of the internet is now well and truly over.