By any account it’s been a bad few years for Yahoo. Today, however, with new CEO, Marissa Mayer on board, things look a little more respectable.

What many forget is that Yahoo remains a significant digital publisher. It has a market valuation of $19 billion, revenues of nearly $5 billion a year and operating cash flow of $1.42 billion.

Mayer, once the head of search at Google and a major influence on the look and feel of Gmail and Google images, brings a formidable set of talents to Yahoo. However, the big question is this – will these talents be used to attempt to ‘rescue’ Yahoo and re-build the company or will they be used to ‘re-structure’ Yahoo and turn it into an appealing takeover prospect for another digital giant?

One web giant that could be a perfect suitor for a streamlined Yahoo is Amazon. Below are five good reasons Amazon should buy Yahoo, once Mayer has set it up for purchase.

1: Amazon is an expert at digital advertising, probably even better than Yahoo. Its ‘People who bought this, also bought this’ feature has transformed the way consumers spend money online. It could bring its vast knowledge of customised ad solutions to Yahoo and transform it into an even bigger online publisher.

2: The Kindle. Amazon has an enormous amount of data from Kindle users and a vast knowledge of what people like to read or watch, and when and where. Yahoo has a vast publishing division. Many lucrative opportunities arise by combining the assets.

3: Amazon and Yahoo, once joined, could combine their data and technologies to suggest articles to readers on their Kindles. Analysing their combined browsing data means they will be able to offer highly tailored, even personalised advertising opportunities. Most importantly they will also be able to sell these as mobile ads. The Kindle, after all, is a mobile device.

4: Digital companies live and die by their audience share, the data they hold about their audience and how successfully they make money from them. A timely combination of Yahoo’s publishing, video, mobile and broadband services with Amazon’s enormous stockpile of user data is, on the surface, a potential goldmine waiting to happen.

5: Both Amazon and Yahoo hate Google. As Google enters the mobile and tablet arena it steps on the toes of Yahoo and Amazon by chipping away at their display ad revenues. Google is also entering the TV business and the film on demand business.
Amazon and Yahoo have also signed up to the Open Book Alliance, which will oppose Google’s crusade to make digital copies of as many printed books as possible.
In short, if Yahoo is to realise its potential, before it’s too late, it may have hired Mayer as the person to prepare the company for sale to Amazon.
Watch this space.