Would anyone buy Yahoo? There are a lot of good reasons to do so:
- Great brand
- Huge traffic
- A fat pipeline of products
- Overhauling technology - expected to close the gap with Google
- Overhauling company structure - expected to produce a quicker, leaner, meaner company
- Shares low now compared to their all time highs
William Blair analyst Troy Mastin reckons Yahoo is a good target for the cash rich buyout firms (and buyout firms, in the States, are cash rich right now).
There's a catch. Although Yahoo is a good target it is an unlikely target due to its size. Yahoo has a market cap of nearly $40 billion so if you add a mere 20% premium to that then you'd need $48 billion to buy the internet giant. That would be a record breaking buy out.
Mastin also worries that any departure which resulted in the stock incentive to staff being rescinded would trigger a staff exodus. Eh? That's happened already.
I like to float the idea of Microsoft buying Yahoo. It does put a theoretical challenger to Google up for an interesting twist. The truth is that that's very unlikely.
Remember how Yahoo looked when it was young? $48 billion for ...