May 13, 2008 | Tuesday
Analyst: Yahoo/Microsoft deal “dead for good”
By Jackie Danicki - Blogger in News |Search Engines |Google |Yahoo |Microsoft
Trip Chowdhry of Global Equities Research has this to say:
Our research indicates that [the] Microsoft/Yahoo deal is dead for good. Investor optimism that MSFT may revisit YHOO is probably misplaced. Getting DOJ’s approval would have been almost impossible as anti-trust issues in this potential combination are to serious to ignore…MSFT is better off without YHOO.
So what is billionaire investor Carl Icahn doing stocking up on Yahoo shares - to the tune of 50 million - in preparation for a proxy showdown?
As CNBC notes:
It would be a risky strategy especially because beyond a deal to sell out to Microsoft, there don’t appear to be too many levers to pull in order to create near-term shareholder value.
Which may be why analysts are recommending that any “activist” investors get on the dog and bone to Microsoft to see if their $33 per share offer is still on the table. The deadline for nominating new directors for Yahoo is, er, Thursday. Best not put that call off too long, then.
Pundits say that Icahn’s proven track record of making companies face the ugly truth about their lack of success could make him a godsend for Yahoo, a company that has never quite known what it wanted to be. Interestingly, that’s the opposite of what many say afflicts Google: hyper-focus when it comes to where the money flows into the company.
What they need to do is build a full portfolio of revenue, as Microsoft has. They have a fantastic cash cow. They need a goat and a chicken.
That’s Salesforce.com CEO Marc Benioff - and Google business partner - on the giant’s reliance upon search engine marketing to keep it going. While the future is bright for search, as confirmed by every piece of research and projection to come along in recent months, the fact is that a single point of revenue could also be a single point of failure. That said, Yahoo’s board and investors are probably rather envious of such a dilemma right now…
Comments
There are no comments for this entry yet. Use the form below to add yours.