We're just speculating here, Sam.
Not saying MSFT's acquiring YHOO is essential for YHOO (but owning 20+ percent of MSFT is nice!). Yet it makes abundant sense for MSFT if it wants to outgun AOL. Sure, MSFT could buy one of the others (USAI/TMCS/LCOS, perhaps?), but if it doesn't take out YHOO, it will be *competing* with YHOO as well as AOL.
Here's an interesting question: If MSFT announced this deal, would it sell off (by your valuation yardstick, as much as 15-20 percent)? Bet it wouldn't.
Here's another way. Pursuant to the acquisition of YHOO, MSFT could spin off its Net operations, put in some cash and still control the thing. Ironically, you could even make a case that the acquisition of YHOO under these circumstances becomes the keystone of MSFT's settlement strategy.
Finally, let's ask ourselves this: If MSFT doesn't buy YHOO, what else could it do, and how quickly, to capture Net leadership? Per Media Metrix, MSN's behind YHOO and AOL by 10mm monthly visitors, suggesting a needed increase of 50 percent to get to 30mm+. Don't see an easy answer. As usual, money's cheaper than Internet time and stock at "only" an 81 multiple is cheaper still...
So, here's a question: When's the earliest date MSFT could announce a settlement?
BAM |
