Yahoo brings in a dealmaker: Transactions ahead

Yahoo's choice for Chief Financial Officer, Blake Jorgenson, formerly of the investment bank Thomas Weisel Partners, indicates the company has decided to compete through acquisition. You don't bring in a dealmaking gun if you aren't prepared to pull the trigger on a lot of acquisitions.

Having been beaten to the punch by Google on several big acquisitions recently, including the $3.1-billion DoubleClick ad network, Yahoo is clearly concerned that its capital is not being deployed as effectively or frequently as Google's.

I think the value of the Google acquisitions is questionable, since the company paid huge premiums for customers that, frankly, they could have had much more cheaply by actually selling to them.

But Terry Semel, Yahoo's CEO, seems to be of the mind that deals make the executive. At a time when so many new features and services are being launched by startups, it makes sense to acquire some things, but not much. Innovation is literally laying around for folks to pick up. A high-powered investment banker doesn't necessarily make deals cheaper.

Where banking expertise could help is in the international expansion market, as Yahoo seeks to claim a portion of the attention provided by users around the world. Even there, given the experience of Google in China in competition with Baidu and other domestic search players, it is not clear that it is possible to capture a loyal customer more cheaply (granted, it can be faster) through acquisition.

I don't agree with Larry Dignan that this means the Yahoo reorganization is complete. It is still very much an open question whether Semel will remain. Jorgenson could very well be the guy brought in to get the best price for the company as a way for Semel to step out of Yahoo with a "success" under his belt.