In Yahoo Using Google: I Am Not Sure This is A Good Idea, John Battelle suggests Yahoo and MSN can take on Google and might win.  It won't work, the war is already over about Search Dominance and both have lost.  Also, John Battelle brings up an analyst's report that says Yahoo ought to drop it's own search engine and go back to using Google's Search while laying off 25% of it's employees, thereby becoming profitable again.

"…Lindsay’s advice: outsource search to Google, and cut staff by as much as 25%. He thinks the company could boost 2008 operating income by $565 million, and EPS by 24 cents, by outsourcing search; cutting a quarter of the staff could add another $658 million in operating income, and another 28 cents in EPS, he figures. He also contends Yahoo needs to restructure its display advertising business to boost growth to the industry average; if they can do that, he writes, the company can add another $376 million in revenue and 15 cents in EPS. "

It's a mute point, but financial analysts tend to look at everything in terms of what will make/lose the most money and are pretty much blind to everything else - like the rest of Wall Street (some who would sell almost anything if it would make enough of a profit for their portfolios).

I don't see Yahoo or Microsoft leading in Search again, ever - the time for that has passed; the only areas they can dominate is in niches.  For example, I hear alot of people raving lately about Ask.com's map search, people search …. etc.  Clearly, Ask may have a better product than Google - but it's still going to get next to no usage compared to Google - because most people don't care about those features enough to change over to Ask.com; same with Yahoo and Microsoft, except for certain features, which may appeal to some over others (but it will never be enough people to make any real difference).

I don't know about abandoning Yahoo's Search Engine and using Google while cutting 25% of Yahoo's employees .. I think, again, it's besides the point - and it's also a pretty nasty policy may prop up Yahoo's stock temporarily - but will probably hurt it in the long term.  But that's just what you expect from a Financial Analysts who are probably using Hedge Funds to gain when Yahoo goes up and profit again when Yahoo goes down.

I tend to not want to listen to Financial Analysts…can't you tell?