Yahowl! What Now?

Fresh details are leaking out about the final moments of the Google-Yahoo deal. In an interview with the New York Times, Google CEO Eric Schmidt claims that the company backed away from the deal in literally the final hour, just 60 minutes before the Justice Department was due to file a lawsuit to block it. However, Schmidt insists that the arrangement was perfectly sound and Google would have ultimately prevailed in court. Maybe that has something to do with his new coziness with Barack Obama; Schmidt is attending an economic summit with the president-elect this morning.

Meanwhile, Yahoo's troubles are only beginning. Yesterday, Microsoft CEO Steve Ballmer declared that his company won't touch Yahoo with a 10-foot pole and threw a little salt in the wound to boot. "We are not interested in going back and re-looking at an acquisition," he said, according to PC World. "I don't know why they would be either, frankly. They turned us down at $33 a share." Yahoo is currently trading at just under $14 a share."

Now, the big question is: What's left for Yahoo? And can the company even survive? InfoWorld's Robert Cringely is busy composing metaphors for the company's weakened position: Is it about to enter a tiger cage or a shark tank? At Wednesday's Web 2.0 conference, John Battelle asked CEO Jerry Yang about rumors that Yahoo might buy whatever's left of AOL; Yang immediately changed the subject. In fact, he was more interested in trying to expand Yahoo as a consumer brand and starting point on the Web, a la Google and Facebook. According to Forbes, Yang wants to open up the Yahoo site to the developer community and let them design applications to make Yahoo more interesting, useful, and interactive. But what, exactly, will Yahoo offer people? News and e-mail, apparently, with a dash of Yahoo style to liven things up. But will that pay the bills? Just ask the nation's newspapers how that's been going for them.