Recent speculation that Yahoo came fairly close to buying the Huffington Post made me reflect on a few things regarding Yahoo. First off, with a lack of excitement, the company is desperate for some growth, something new and exciting is maybe the only way CEO Carol Bartz could buy a few more months at the head of Yahoo. The company does have plenty of cash and could look into a few options. Since the company has decided to basically outsource its search efforts to Microsoft’s (MSFT) Bing, it will now have its focus on content, entertainment and news. With that in mind, let’s take a quick look at 3 options:

-AOL (AOL): Cost Approx $3 billion - AOL has been discussed time and time again. The pros are that AOL has a huge inventory of stocks, has a solid presence in many of the segments that Yahoo has been competing in and is very strong in the local web which has been a major focus of Yahoo as well in recent years. One of big problems that I see is that AOL is already a very large and inefficient organization after years of restructures and changes. It is a vertical company and adding it to Yahoo would probably not make it much more efficient. It is also doubtful that Carol Bertz would press for this one as most rumors regarding a Yahoo-AOL deal speculate that AOL CEO Tim Armstrong would likely be in charge of the new company.

-NY Times (NYT) - Cost approx: $1.4 billion – The NY Times has been at the center of the news for years. The fact that it is fighting to stay alive gives us a very good idea of how bad things have gotten for “old media”. The Times, generally agreed as the top brand in the industry anywhere in the world has been slowly transitioning into a 21st centure media company and does have the most visited news website in the world. It is clear that the NY Times can get its fair share of revenues in this new era but what isn’t clear is how its cost structure can be modified to remain profitable. Yahoo would clearly benefit from acquiring such a strong brand and a quantity of content that is beyond anything it currently has. The Times has struggled with its revenue model, going back and forth between an ad supported model and a subscription based model. I would think  that Yahoo would be in a very good position to help the Times improve its digital strategy.

-Huffington Post (unlisted) – Cost approx $200-250 million – The Huffington post is the player that you might never have heard about but is actually the runner up to the New York Times in terms of news traffic. Yahoo actually came close to buying the blog a few months ago but had deemed the cost too expensive. Well guess what, the price has jumped big time since then. The Huffington Post is probably the most efficient structure that you could get and Yahoo could certainly learn a lot by acquiring the private company. It’s not quite clear how well the integration would go but I think that Yahoo could certainly gain a lot from making this purchase. Given the much smaller cost, I think this is the best solution for Yahoo at the moment, it has limited risk, could help increase the efficiency of Yahoo across the company and would add growth to a company that is desperate to find some.