Yahoo! (YHOO) struggle for freedom
04-09-2008: The Microsoft/Yahoo saga continues to get more interesting by the day. One thing is for sure, something is going to happen in the next few weeks. After scouring the net, it appears most analysts believes Yahoo is just employing a delay tactic to get Microsoft to increase its bid by cuddling up with Google (Yahoo to test out Google adsense). While this might be the ultimate goal of Yahoo, we believed there is more to it than meets the eyes. Although there have been no other bidders, we do believe Yahoo does have viable alternatives.
We believed Yang's efforts to seek alternative deal for shareholders is genuine. The desire to maximize value and keep Yahoo independent appears to be real. Most CEO would probably have given in to Microsoft by now. To this extent, we give Yang and his teams a lot of credit. Unlike the Wall Street analyst who could careless about what happens to Yahoo as long as they profit from the deal, Yang has more at stake. His legacy will depend on what happens with this deal.
From Yang’s perspective, if Microsoft succeeds, his company will succumb to the same fate as the other dead internet companies (too many to mention). As a Yahoo shareholders, we plan to hold onto our YHOO shares. When it is all said and done, we believed Yahoo should be trading in the mid 30s.
This just in...According to the Wall Street Journal, the latest rumor is that Yahoo and AOL will merge. Time Warner would get 20% equity in the company and Yahoo would use the cash to buy back shares. Although the deal is still sketchy, we like the sound of it. If this does work out, we believed it will represent a much better value for investors in the long run. This is a deal Yahoo's board would welcome since the company would be able to remain independent. However, the question is, will it be enough to convince the large investors.
