Yahoo! a bid target

Yahoo! could become fair game for a hostile takeover, after issuing a profit warning and began looking for a new boss on Wednesday. Analysts told CNN that media conglomerates Bertelsman, Vivendi, Viacom, Disney and AT&T could be possible bidders, particularly if Yahoo's share price falls below $10. The same analysts agree that Yahoo! can't survive in its present format or with its present management team. Speculation is rife that management have disagreed over Yahoo's long-term strategy. Yahoo! has relied on online advertising for around 80% of its revenue and been referred to, rather disparagingly, as a glamourised search engine. Other Internet portals have introduced business models to create a billing relationship with their users through subscriptions. This relationship can then be extended through other mediums such as mobile phones, hopefully creating further revenue. With the general slowdown in online advertising, building an ongoing relationship with its audience seems to be the more acceptable business model. Yahoo! has around 100 million users so if it charged a subscription, substantial revenues could be raised.The failure of Yahoo! to adapt and change its model resulted yesterday in Nasdaq ordering the suspension of trading in Yahoo! shares pending Yahoo!'s profit warning. Yahoo!'s outgoing chief executive Tim Koogle said that "a broad range of customers have delayed their spending across all media formats until their economic outlook improves. The Yahoo! share price was suspended at $20.94 and fell to $18.56 in after-hours trade a far cry from its peak of $205 last year. On Thursday, in Frankfurt, the share had dropped 15.5% to Euro19.10.