A Bird (Microsoft Offer) in Hand Worth More than Two in Bush (Google+Yahoo)

What will Yahoo board decide this weekend? Or by early next week? Yahoo Inc. (NASDAQ: YHOO) was one of the Top 20 Innovators of The Innovation Index.

Will Yahoo ride into the sunset? A $44.6 billion offer is a bird in hand after all.

Is Google Inc. (NASDAQ: GOOG) playing spoiler to stall the pending Yahoo acquisition by Microsoft Corporation (NASDAQ: MSFT)? Why not! Google has nothing to lose, everything to gain from the deal falling apart, or taking years to consummate.

What options does Yahoo really have at this point?

1. Tough it out all alone - Obviously this is not working with the ever widening gap between Google and Yahoo. But as long as Yahoo is profitable, it can call its shots. It can do what it pleases. It can take the time it takes to turnaround. And if all that does not work, well, Yahoo can look back and say, we tried! Dell is trying hard to turnaround. Yahoo can too.

2. Get acquired by Microsoft Corporation (NASDAQ: MSFT), the 800 lb gorilla - Can it work? Lose the independence. Lose the freedom. Redmond and Silicon Valley. Unless Microsoft makes Yahoo an independent business. But after Microsoft shells out close to $23 billion or so in cash, would it have the luxury to let Yahoo run by itself. May be not! And who would run the show post acquisition? Jerry Yang or a Microsoft elected official?

3. Partner with the nemesis Google, the company that put Yahoo in this precarious position in the first place, and made it difficult for Yahoo to catch Google. - How will the partnership work? Google is already taking market share from Yahoo, and eventually seize 80% of the Search market - a position that will make Google a virtual lock for years to come. Why delay the inevitable? Can Google really be the friend Yahoo is seeking?

4. Merge with Amazon.com Inc. (NASDAQ: AMZN) or eBay Inc. (NASDAQ: EBAY) - this looked like a viable option. Merger of equals. Merger of friends. This may have been the best option, although time seems to be running out for this one. Neither Amazon.com nor eBay have come forth. And Yahoo may not have asked either. The world would have welcomed an eBay - Yahoo merger. That may have been the lasting legacy of Meg Whitman. But alas. Not to be.

So what will Yahoo really do at this point? Take the bird in hand, or place bets with Google or go solo? Microsoft has not really put a time pressure on Yahoo. But investors, customers, partners and employees are queasy on what decision Yahoo will take. And it's time! If Yahoo takes too long to decide, everyone will simply question the leadership at Yahoo. Yahoo must decide next week. Yahoo will.

Amazon.com, eBay, Google and Microsoft are Top 20 Innovators of The Innovation Index.

Invest in the Innovation Index Fund

We launched the new Innovation Index Fund in December, 2007 that invests in the Innovation Index and returned 66% in 2007, and 174% in the previous five years. If you want to learn more about the Innovation Index Fund, fill out your contact information at the bottom of this form: http://www.innovationindexgroup.com/invest.html

The Innovation Index Reports:

Invest in The Innovation Index - Invest in the brand new Innovation Index Fund
Introducing The Innovation Index Fund - Invest into The Innovation Index
Top 50 Innovative Companies in the world - 2007 Report on Top 50 Companies
Annual Report - Chapter One - Total Innovation Activity - 2006 Annual Report One
Annual Report - Chapter Two - The Top Innovator - 2006 Annual Report Two
Annual Report - Chapter Three - The Innovation Insights - 2006 Annual Report Insights
Innovation and Stock Performance Correlation - The Innovation Index and Stock Performance

About The Innovation Index

The Innovation Index introduced in December 2006 is a weighted stock price index of the top 20 Innovators in North America.

The Innovation Index returned 66% in 2007, and returned 174% over the previous five years (2002-2006). This assumes equal investment in each stock of The Innovation Index as of December 31, 2001. An average of $100 invested in The Innovation Index on December 31, 2001 returned $454 as of December 31, 2007. By comparison, $100 invested in S & P 500 returned 28% or $129, $100 invested in NASDAQ returned 34% or $136, and $100 invested in the Dow Jones Index returned 30% or $131 through December 31, 2007. The Innovation Index beats the S & P 500, NASDAQ and Dow Jones Index by more than seven times over the past six years.

Alphabetical list of the Top 20 Innovators of The Innovation Index for 2008 and their stock ticker symbols:

3M Company - (NYSE: MMM)
Amazon.com, Inc. - (NASDAQ: AMZN)
America Movil - (NYSE: AMX)
Apple Inc. - (NASDAQ: AAPL)
AT&T Inc. - (NYSE: T)
Best Buy Co., Inc. - (NYSE: BBY)
Cisco Systems, Inc. - (NASDAQ: CSCO)
Costco Wholesale Corporation - (NASDAQ: COST)
eBay Inc. - (NASDAQ: EBAY)
General Electric Co. - (NYSE: GE)
Google Inc. - (NASDAQ: GOOG)
Hewlett-Packard Co. - (NYSE: HPQ)
Intel Corporation - (NYSE: INTC)
International Business Machines Corp. - (NYSE: IBM)
Merck & Co., Inc. - (NYSE: MRK)
McDonald's Corporation (NYSE: MCD)
Microsoft Corporation - (NASDAQ: MSFT)
NIKE, Inc. - (NYSE: NKE)
Research In Motion Limited - (NASDAQ: RIMM)
The Proctor & Gamble Company - (NYSE: PG)

The Innovation Index will analyze the positions and standings of the Top 20 Innovators at the end of each year. For 2008, there will be no further changes in The Innovation Index.

Disclaimer: The Innovation Index Group, Inc. invests in the stocks comprising The Innovation Index.