Google/Yahoo! Deal "One of the Worst Strategic Maneuvers Seen in Internet Industry" -Deutsche Bank (GOOG, YHOO)
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Deutsche Bank is out with a research note today considering the impacts of the Google (Nasdaq: GOOG)/Yahoo! (Nasdaq: YHOO) deal on shares of Yahoo!. The firm maintains a Hold rating and $17 price target on Yahoo!.
From Yahoo!'s perspective, the firm calls the deal "perhaps one of the worst strategic maneuvers seen in the Internet industry..." Deutsche believes the deal "effectively signals the end of Yahoo!'s competitive entry in the paid search business..." as advertisers will now likely just work directly with Google. Deutsche seems baffled by this deal, saying "we don't understand this deal, and expect Yahoo! shares to trade lower due to its strategic implications."
The Deutsche report calls Google the sole beneficiary of the deal and estimates that Yahoo! will replace at least 35% of its search queries with Google next year. Notably, the firm's price target represents what it believes to be Yahoo!'s fundamental value.
Yahoo! Inc. provides Internet services to users, advertisers, publishers, and developers worldwide.
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