The Aftermath of the Yahoo and Microsoft Deal
If you have looked at the stock market (U.S.) lately then you cannot have missed a couple of things. Banks are still reeling, Lehman Brothers being the latest in a string of major financials that have had to seek out financing to shore up massive losses. Oil companies are getting a lot of negative publicity due to the election year politics. Energy alternatives are sparking another round of interest, as the generally do every election year for the past roughly 20 years.
But what has garnered a lot of attention is the sector that no one has really spoken about in some time. The technology arena. In particular the latest mega-deal, Yahoo and Microsoft. Everyone has heard some aspect of it, and opinions are flying.
Now the deal officially died last week. Microsoft won’t raise their price or even offer one for Yahoo. Yahoo for its part made a deal with Google, allowing ads from the leading search engine to appear on Yahoo for $300 million. So the shake up begins.
Microsoft has had it’s price raise because it won’t be buying anything, and stockholders will be happy about not having the books burdened with Yahoo. Google is happy as they seriously increase ad revenue with the increased exposure. The likelihood of increase revenues for higher ad fees and increased numbers are on the horizon and analysts will be checking the quarterly reports to see if a new trendline confirms this speculation.
Those looking at what may happen should keep an eye out on Yahoo. After failing to be bought by Microsoft, and only securing a deal that really benefits Google the shareholders are boiling. The desire for bigger profits is going to weigh heavily on the CEO and Board. Something is going to need to be done.
I expect that a couple more deals and the takeover of a smaller technology company will be in the air for Yahoo. Plus an expanded advertising sales campaign will likely unfold within the slow summer quarter showing better numbers as fall unfolds. If I am correct opportunity may abound in the disappointment this deal failing has caused.
But that is just one outlook. What do you think?