Can Yahoo! do it?

Yahoo is struggling to keep up with the current Web trend. Carol may sound more optimistic in the above video, but the latest news suggests that Yahoo is planning to cut 5% of workforce. Nevertheless, she does has a point about the Microsoft-Yahoo search deal. The ten year deal allows Bing to power Yahoo search and allows Yahoo to keep 88% of the search ad revenue. Microsoft gets remaining revenue and gains access to the user info and preferences thereby helping in more targeted ads. This might add additional $500 million revenue for Yahoo.
But this still is not enough to stop the other businesses from faltering. Before the Y2K boom Yahoo was the trendy web and search company attracting most of web traffic. Its failure to innovate in search and missing the Social Networking wave has cost it dearly. I am afraid Yahoo shouldn't become the next Sun Microsystems or Novell.

Private Equity Firm bids for Novell

Novell has announced that it is considering a bid by Private Equity Firm Elliot Associates to acquire it. At a price of $5.75 /share it will be an acquisition worth $1.8 billion. The price is almost 21.1% premium of what Novell's share was selling earlier. The news has sent Novell's share sky high in latest trading.
If this deal goes through Novell will become a private company.
Novell has been struggling to prop its legacy Netware based business with Suse Linux portfolio. Though it has not been completely successful in doing so, as evident from its falling sales quarter-on-quarter, the Linux division has shown some impressive growth. It has break even in the last quarter. But still Novell ranks a distant second in the Enterprise Linux market behind Redhat which sure is leader in that area.
Though the overall revenue of Novell might not be attractive, it still has a cash flow of around $981 million in its hands which might have attracted Elliot Associates. Can the equity firm turnaround the struggling company after takeover without burning the cash? The possibilities look  grim. But if Elliot is able to spun off Novell's struggling divisions out and concentrate on it Suse Linux based offerings then it will still might squeeze out profits from Novell.
Elliot might not be alone in its bid soon. Most analysts expect Dell or Cisco or VMWare or even Microsoft (though highly unlikely) to offer competing bid to takeover Novell soon. That might make sense for those companies as they have enough cash and a Enterprise Linux product in their offering will sure add up to their top line.
For me the only concern is the takeover might have significant impact on the community based development of Suse Linux. If Novell is to go down, that will make Redhat a monopoly in Enterprise Linux arena which is not good for innovation. Also the efforts for interoperability between Windows and Linux done by Microsoft and Novell might also be jeopardy. That might affect the customers as well.