Re: [MLUG - DISCUSSION] News Alert: Microsoft Says It Is Withdrawing Bid for Yahoo (fwd)

["Scott Hussey" <EMAIL:PROTECTED>]

On Mon, May 5, 2008 at 9:14 AM, Jonathan King <EMAIL:PROTECTED> wrote:

But it's hard to see why. Rationally, a stock is worth the net present
value of its cash stream to shareholders. Yahoo pays no dividend, and
is unlikely to in the near future.I don't think they are sitting on a
wad of cash, so that can't be the source of value. As it happens, the
value of Yahoo is predicated on either it eventually starting to pay
dividends *or* it being acquired by another company. With neither
thing now very likely to happen soon, I'm not sure what's pumping up
its stock price. Sure enough, it's falling pretty hard today.

I think the only value Yahoo holds is the present notion of "paying for page views". Somewhat long the same lines as why Google coughed up $1 billion+ for Youtube. Of course the only way to turn that "value" into equity is by leveraging the page views into income, which it seems is something Yahoo hasn't excelled at (and Google has). I'm not sure MS would have done it better, but at least the Yahoo shareholders would have been happy and the burden would have passed to the next set of investors. 


-- 
Scott Hussey
EMAIL:PROTECTED
http://www.alexusstudios.com
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