Yahoo comes up short among a group that matters

Steve Ballmer obviously needs to do a little brand building of his own.

Speaking of which, I couldn't help but notice how often Rupert Murdoch's name came up during our conversation.

On the one hand, the News Corp. chairman and chief executive got props for owning social-networking site MySpace, even though everyone agreed Facebook is way cooler.

But Murdoch was also viewed by some as a manipulative, world-dominating figure, the Dr. Evil of corporate America.

"If somebody like Rupert Murdoch bought Yahoo, we would get whatever news he wanted to show, not what we're searching for," said Garrity, 16. "When I do a search, I don't want to see someone else's priorities."

The consensus among the kids was that Yahoo's a goner if it sticks to its guns about going solo.

Google is crushing Yahoo when it comes to search and free e-mail, they said, and there just aren't enough good reasons to visit Yahoo or stay within its online ecosystem -- an important selling point for advertisers.

"Microsoft would make Yahoo better," said Jason, 16. "Microsoft has ideas about how Yahoo can compete with Google."

Whether or not that's true, the perception among the students, as well as many in the investment world, is that Yahoo had its chance to dominate the Web and was eclipsed by a more nimble player.

Personally, I think Microsoft's and Yahoo's corporate cultures would make for strange bedfellows, and that a merger would cause more problems than pluses. Think Time Warner and AOL rather than Disney and Pixar.

That said, Microsoft might be Yahoo's best hope for long-term survival amid a rapidly consolidating media landscape.

"I don't want to see a Bear Stearns thing happen to Yahoo," said Andrew, 15. "It would be a smart move on Yahoo's part to avoid that."

Andrew, who clearly finds his way to the business section from time to time, was referring to investment bank Bear Stearns' fire-sale acquisition by JPMorgan Chase. JPMorgan originally offered a measly $2 a share for the ailing Bear Stearns, but then upped the price to $10 a share as a sop to outraged investors.

Yahoo, unlike Bear Stearns, isn't knocking on death's door. But the company's prospects aren't shiny and bright. No wonder Yahoo's stock plunged 15% Monday after the talks with Microsoft collapsed over last weekend.