The Breakdown

Explaining Southern California's economy

Wait! Maybe Yahoo will move to LA!

A while back, I suggested that Yahoo, the beleaguered technology colossus, should close up shop in Silicon Valley and move all its operations to Southern California. (It already has an office in Santa Monica.) Now CNN's Juilanne Pepitone reports that something along those lines might be in play. Could Disney buy Yahoo? Here's the lowdown:

While Disney hasn't thrown its name into the ring, one analyst thinks it and its big-media rivals should consider a Yahoo buyout.

"The big guys -- Apple, Google -- aren't interested. And either way, it would make more sense for a traditional media company to buy Yahoo," says James Dobson, stock analyst at The Benchmark Group.

That's because traditional media companies are struggling with how to monetize their online presence. They're still working through the transition from old to new media, and they face stiff competition from upstart online publications.

There's skepticism about this idea — not because Disney wouldn't benefit from buying Yahoo, but because Yahoo would be such a big financial bite. 

Fair enough, but Yahoo can't seem to get any respect in Silicon Valley or in media circles. When we want to talk about tech leadership, we talk about Apple, Google, and Facebook. When we want to talk about news leaders, Yahoo doesn't enter the conversation, despite its vast reach and massive levels of traffic. 

Maybe the Disney magic is just what Yahoo needs. It would certainly be a boost for the idea that LA can nurture a union between Big Entertainment and Big Technology (you'll recall that this elusive nexus has been under discussion for, like, more than a decade). Otherwise, Microsoft could be back in the picture, after offering to buy Yahoo in 2008 for what now seems like a whopping $47 billion — and being rebuffed by Yahoo's board in a way that stunned outside observers.

But really, Microsoft doesn't need to be buying Yahoo right now. It needs to develop a mobile strategy and keep pace with Apple and Google. Or figure out social media. Or cloud computing. Or something that's happened in the last ten years. 

Buying Yahoo would be the opportunity of the young century for good old Disney, which could acquire at least the sturdy remnants of a tech brand for half what Microsoft was willing to pay. The big question is whether Disney has the resources to go it alone or would need to gather a band of investors to mount a convincing takeover.

Follow Matthew DeBord and the DeBord Report on Twitter.

Photo: Justin Sullivan/Getty Images

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