Tuesday, 9 August 2011

Is! Yahoo! A! Takeover! Target!

There is more speculation about this week that Yahoo! might be an acquisition target as a result of their desirable stakes in Alibaba and Yahoo! Japan, which are between them estimated to make up more than 40% of the company's estimated USD$14bn market capitalisation.

Any deal for Yahoo! - who are thought to be being closely watched by private equity organisations - could effectively result in any suitor picking up the US business effectively for free according to one analyst, emphasising just how much they have ceded search market share to Google.

Alibaba is China's biggest e-commerce company and Yahoo! are in the process of healing a dispute with them over their sale of online payments service Alipay to Alibaba's founder without their prior knowledge, and some Yahoo! shareholders have also launched legal action against Alibaba over the deal.

As you will recall, Microsoft failed in an attempt to pick up Yahoo! for as much as USD$47.5bn three years ago. At current share price Yahoo!, whose shares have dropped 91% in the last decade, is valued at just USD$14bn.