A Potential Facebook/Yahoo (YHOO) Deal Leaves Balance Scale Looking Slanted
Tweet
Share
E-mail
Get Alerts YHOO Hot Sheet
Join SI Premium – FREE
Reuters speculated today that one strategic option for Yahoo (Nasdaq: YHOO) maybe a takeover from Facebook.
The two companies already have a common search competitor with Google (Nasdaq: GOOG) and a common partner with Microsoft (Nasdaq: MSFT).
Besides gaining more market share against Google and strengthening its partnership with Microsoft, the acquisition gives Facebook the opportunity to go public sooner than its expected early 2012 release. While this deal would go over well with Yahoo shareholders, Facebook investors may not feel the same way.
The acquisition would provide Yahoo with its current missing link, management. Although Yahoo has a large number of users, customer loyalty and brand reputation are two things that the online company is really lacking. Facebook has roughly 750 million users and has just begun milking the pockets of them, which has resulted in its revenue doubling over the first half of 2011.
With Yahoo! market cap at mere $18 billion, Facebook has the potential to purchase the company with cash on hand.
So the real question is how bad does Facebook's Mark Zuckerberg want to go public, and what are they willing to do to get there? If you ask Mark Zuckerberg's former best friend or the Winkleman twins, they might just say he is willing to do anything thing he wants to get what he wants.
Shares of YHOO closed down yesterday $0.22 or 1.52 percent to $14.26 and are trading down another $0.06 in the pre-market hours today.
The two companies already have a common search competitor with Google (Nasdaq: GOOG) and a common partner with Microsoft (Nasdaq: MSFT).
Besides gaining more market share against Google and strengthening its partnership with Microsoft, the acquisition gives Facebook the opportunity to go public sooner than its expected early 2012 release. While this deal would go over well with Yahoo shareholders, Facebook investors may not feel the same way.
The acquisition would provide Yahoo with its current missing link, management. Although Yahoo has a large number of users, customer loyalty and brand reputation are two things that the online company is really lacking. Facebook has roughly 750 million users and has just begun milking the pockets of them, which has resulted in its revenue doubling over the first half of 2011.
With Yahoo! market cap at mere $18 billion, Facebook has the potential to purchase the company with cash on hand.
So the real question is how bad does Facebook's Mark Zuckerberg want to go public, and what are they willing to do to get there? If you ask Mark Zuckerberg's former best friend or the Winkleman twins, they might just say he is willing to do anything thing he wants to get what he wants.
Shares of YHOO closed down yesterday $0.22 or 1.52 percent to $14.26 and are trading down another $0.06 in the pre-market hours today.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Microsoft is planning to merge its consumer and enterprise Copilot chatbots in August - The Information
- Stocks expected to have increasing option volume: INTC GOOGL GOOG STZ LEU FIZZ WHR AEO BIIB ORCL
- NVIDIA (NVDA) Says It Will Take a Cut of Some Customers’ Cloud Revenues - The Information
Create E-mail Alert Related Categories
Insiders' Blog, RumorsSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
